Tara Mines CEO says company was facing ‘tremendous unsustainable losses’
The CEO of Tara Mines in Co Meath has said the decision to temporarily close and lay off up 650 workers was done in the face of “tremendous unsustainable losses”.
Gunnar Nystrom said Tuesday’s decision was a necessity to safeguard the future of the company and stem the cash flow out of the company.
Speaking to RTÉ’s Morning Ireland on Wednesday, Mr Nystrom said the closure was brought about by a “perfect storm” of four factors; falling zinc prices, electricity prices, inflation, and operational issues.
“The zinc market seems to be very volatile at the moment.” The company is owned by Swedish multinational Boliden which also holds zinc mines there.
“The decision that was made last night was purely Tara Mines alone.” Mr Nystrom said Tara Mines had been a very high-cost operation and more expensive to run than its other mines.
Enterprise and Employment Minister Simon Coveney urged Tara Mines to support its staff while the mine is closed, and warned that it might not have a sufficient workforce when it reopens if these obligations are not met.
Mr Coveney made his comments on following a decision by Tara Mines last night to tell its 650 workers that the mine will close due to surging energy costs and a reduction in zinc prices.
“If they want to make sure they have a workforce in a few months’ time, if and when the mine can reopen and get back to full operations again, then they have an obligation to support that workforce through that difficult period,” said Mr Coveney.
“It’s not just the 650 people, there’s about 2,000 people in and around the Navan area that are linked to Tara Mines in one way or another,” said Mr Coveny.
Mr Coveney also said he was scheduled to meet with the Tara Mines management team yesterday to discuss its cost pressures and that the “decision came out of nowhere yesterday”.
“It really came unexpectedly and I think it was very unexpected even in the company,” he said.
However, Tara Mines had outlined its struggles to the Sunday Times earlier this year in two separate articles.
Tara Mines is projecting a loss of around €100m this year, triggering the board to temporarily close the mine.
It is not yet clear how long the mine will remain closed, but both Mr Coveney and the general manager of Boliden Tara Mines Gunnar Nyström said that the closure is temporary on the radio programme this morning.
“It is not unprecedented that a mine like this would close temporarily. It happened just over 20 years ago in Tara Mines and it’s happened in other parts of the world as well when you have a dramatic price shock or something like that,” said Mr Coveney.
“Because mines are so expensive to keep running at loss, in order to protect the long-term interest of the company, they will just reduce the losses by closing down the mine temporarily,” he added.
Mr Coveney said Government will provide income support to the workers and that Enterprise Ireland are working with apprentices in the mines to find new employers.
But he was unable to say for how long the temporary closure would continue.
SIPTU divisional organiser, Adrian Kane, has said that workers at Tara Mines are shocked and disappointed following the announcement by the company.
He said: “SIPTU members at Tara Mines are deeply disappointed at the news that 650 workers are to be laid off within the next few weeks and the manner by which it was communicated to them.
“Our members are also concerned that they were not informed in advance of this announcement of temporary lay-offs, without pay, by the company.
“Tara Mines is a critical part of both the local and national economy and we will be engaging with management to discuss how the effects of these lay-offs can be mitigated.”
All staff were told late yesterday evening that the mine will temporarily suspend operations in Navan within the next four weeks.
The business said it is currently cash-flow negative and the losses have been brought about by a combination of factors that have made this decision unavoidable.
“We are acutely aware of the difficulty and disruption that this decision will cause for our employees, and the wider community in Navan, where the mine has been operating since 1977,” said Mr Nyström.
“This was not a decision we made lightly, but we simply have to stem the unsustainable cash outflow that we are currently experiencing, in order to safeguard the long-term future of the mine,” he continued.
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