Boliden expects full production at 'financially sustainable'' Tara Mines to happen by next January

Statement from Tara Mines general manager Gunnar Nyström regarding the outcome of the employee ballot on the agreement reached with the Group of Unions on (Friday April 17th.)

"I am pleased that the agreement has been accepted. The last number of months have been very difficult for our employees, their families and the wider community. I would like to thank our employees for their patience during this difficult period.

"The result of the ballot is welcome and will enable us to move forward. We will now begin the process of re-opening and employees will commence their return to work on a phased basis. We will communicate next steps with our employees in the coming weeks. We look forward to welcoming them back to work.

Boliden have also issued to the stock market:

Agreement reached to reopen Tara An agreement has been reached between workers unions and local management which enables the process of reopening the mine at Tara on a more financially sustainable basis.

In July 2023, the Tara mine was put in care and maintenance due to a combination of factors, including negative zinc price development, overall cost level and operational challenges. An agreement between worker´s unions and local management, to significantly improve ways of work and productivity, has now been secured.

The agreement includes among other things an optimized mining plan which reduces transportation distances and maximizes metal output, starting with an annual production rate of 1.8m tonnes, coupled with an organizational redesign, a reduction in employees and improved ways of working.

Altogether, the normal cash cost of the Tara mine is expected to be reduced to approximately 100 USc/lb (US cents per pound) Zinc, compared to 137 USc/lb Zinc for the first half year of 2023. The reduction is attributed to an improved outlook on the price of energy as well as lower benchmark treatment charges (TC) coupled with improved productivity levels.

As a result, one-off restructuring costs of approximately €30m will negatively affect the second quarter 2024, which together with previously announced costs for care and maintenance of -€13m per quarter gives a total negative effect on operating profit for the quarter to -€43m.

The restructuring costs are associated with the reduction in headcount to around 400 full-time equivalent (FTE) employees, compared to over 600 employees before the care and maintenance period, as well as significant organizational changes and changes in the ways of working. Employees will commence their return to work on a phased basis during the third quarter 2024 with an onboarding and retraining program.

Ramp-up of production will start during the fourth quarter 2024, and full production is expected from January 2025. Operating profit during the second half of 2024 is estimated to be about -€25m per quarter, compared to -€13m per quarter during the care and maintenance period.