Dark week for Boliden

The mining company Boliden has had a bad week. First the fire that broke out in Rönnskärsverken outside Piteå on Tuesday night. Then on Tuesday evening a profit warning was issued, mainly because two mines are not doing as well as previously thought. Both things have lowered the share price.

On Tuesday night, a fire broke out that destroyed an electrolysis plant in Rönnskär. This stops production at the Rönnskär plant for at least a couple of weeks. The production stoppage will cost Boliden around SEK 85 million per week. The final cost in terms of loss of production and reconstruction will be determined by what is covered by the insurance.

On Tuesday, Boliden also announced that two of its mines are performing worse than previously stated. The mines in Tara (Ireland) and Kevitsa (Finland) have produced lower copper and nickel grades than previously stated. At Tara, the falling zinc price is causing the mine to make a loss and production is being put on hold indefinitely.

Copper and nickel grades at Kevitsa in Finland have been adversely affected by having to stop mining in one area (omtag 3) and focus on another area (omtag 4) with lower grades. 

"We have miscalculated and thought that we would be able to run omtag 3 and omtag 4 at the same time and we have not been able to do that for safety reasons. We have screwed up and then we have screwed up in the communication where we could have guided in a better way", says CEO Mikael Staffas to Dagens Industri.

Previously, the lower levels in the Aitik mine outside Gällivare have caused concern on the stock market.

"In Aitik, I am not at all worried and in Kevitsa there is nothing to indicate that we have miscalculated how much metal we have in the pit", says Mikael Staffas.

Lennart Håkansson

editor@northswedenbusiness.com