Rescue Plan Rejected at Europe's Largest Zinc Mine

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Workers at Europe's largest zinc mine have rejected a rescue plan that would have included significant job cuts and pay freezes by Swedish owner Boliden (Stockholm, Sweden).

More than 650 workers at Tara Mines in County Meath, Ireland, were "temporarily" laid off last June when Boliden stopped all exploration and production at the mine, citing a combination of factors, including low zinc prices and high energy costs. The mine, which produced 198,000 tonnes of zinc concentrates in 2022, is the largest in Europe. For additional information, see June 27, 2023, article - Work Stops at Europe's Largest Zinc Mine in Ireland. A letter to employees from general manager Gunnar Nystrom outlined a rescue plan for the facility, which Boliden claimed is one of the most expensive of its kind in the world to operate. It said that work practices must change to be viable in times when global zinc prices are low. Up to a third of the workforce would be cut through by voluntary redundancy, according to plans presented to unions and government, while annual production targets would be slashed from 2.6 million tonnes to 1.8 million tonnes.

"We understand that the rescue plan involves significant change for the organization and all of our employees," Nystrom wrote in a letter, cited by The Irish Times newspaper. "We are fully aware of the letter of comfort that all employees have around guarantees on terms and conditions. Given that market conditions have not significantly changed we are now proposing a rescue plan to enable an earlier reopening of the mine and allow it to remain open. We want to protect existing levels of basic pay and in arriving at the rescue plan we have sought, insofar as possible, to protect current basic rates and conditions of employment."

Industrial Info is tracking a project at Tara to expand the operation with the construction of a new 2-kilometer drift tunnel to mine from a new mineralization with an inferred mineral resource of 10 million metric tonnes.

Boliden has been accused by leading workers' union SIPTU of reneging on its previous promises. "The original reason management stated it was placing the mine into care and maintenance was that the market price of zinc had fallen to a degree that made its operation uneconomical," said SIPTU sector organizer, John Regan. "Once the price had returned to an adequate level, the mine was to recommence operation and workers would return to their jobs on their existing terms and conditions. It has now reneged on this position."

The rescue plan presented to workers included a pre-condition that a new agreement with the Tara Mines Group of Unions must be secured prior to any of the workers returning to employment. Siptu added: "It is clear the company is intent on attempting to rip up negotiated agreements and downgrade the hard-fought for terms and conditions of employment of our members. In doing this, it is reneging on an absolute commitment it made to the 650 workers directly employed at Tara Mines that they would return to work with their full terms and conditions of employment intact."

The global markets for refined lead and zinc saw a glut in 2023 and is expected to see more surpluses in 2024, according to data from the International Lead and Zinc Study Group (ILZSG). Zinc saw a surplus of 248,000 tons in 2023, and a surplus of 367,000 tons in 2024 is predicted. Global demand for refined zinc is expected to increase by 2.5% to 13.93 million tons in 2024, mainly driven by a substantial increase in China.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).