MAC: Mines and Communities

Finland: Talvivaara slumps to record low on further leak

Published by MAC on 2013-04-15
Source: Bloomberg, Reuters

Talvivaara slumps to record low on further leak

Kasper Viita


8 April 2013

Talvivaara Mining Co., the Finnish nickel miner, plunged to a record in London trading after another wastewater leak was detected at its only mining site.

Talvivaara dropped 18 percent to 13.50 pence at 10:19 a.m. in London, the lowest since it first sold shares to the public in May 2007. Trading volume exceeded 3.6 million shares, almost three times the three-month daily average.

The company detected a leak yesterday at the gypsum pond of its Sotkamo mine in eastern Finland, according to a statement today. Safety capacity is "sufficient" to manage the leak, it said.

"This string of problems must end," Jari Raeisaenen, an analyst at Pohjola Bank Oyj, said by phone from Helsinki. "In about a year a turnaround in production would need to be visible to prevent financial troubles recurring."

The latest events add to the plight of the troubled miner, which cut its production forecast three times last year to about 13,000 metric tons from an initial estimate of as much as 30,000 tons. Excess water at its open-pit mine site, an 11-day leak of waste water in November and low nickel prices have hurt the Espoo, Finland-based mine owner.

The company said today it will increase purified water discharge to regain water capacity in advance of the spring melt. About 250,000 cubic meters of water have leaked from the pond section adjacent to where the previous leak happened in November.

Last month, Talvivaara shareholders approved a 261 million- euro rights ($340 million) offer to help the company stave off default and bankruptcy.

"Getting production on track is the most pressing issue, that's the way to get cash flow positive and ultimately generate profit," Raeisaenen said.

--Editors: Stephen Cunningham, Amanda Jordan.

Ilmarinen dumps Talvivaara investment after new leak


12 April 2013

HELSINKI - Finnish pension insurance firm Ilmarinen cancelled its subscriptions to a rights issue by Talvivaara after a second waste water leak at the company's mine, raising doubts over its recovery efforts.

Ilmarinen, previously one of the company's top investors, also sold its entire stake, which had stood at 5.08 percent at the end of March, Talvivaara said in a statement on Friday.

Talvivaara's 261-million-euro ($343 million) rights issue was aimed at keeping the mine in Sotkamo, eastern Finland, running after a costly waste leakage in November.

The rights issue was oversubscribed, but Talvivaara had also said investors could cancel following the leak discovered on Sunday. Final results of the cash call are due early next week.

Talvivaara's Chief Financial Officer Saila Miettinen-Lahde declined to comment on whether there were other cancellations.

"The issue process is still ongoing and the only thing I can say is that the results will be announced when they are ready, early next week," she said. ($1 = 0.7618 euros)

(Reporting by Terhi Kinnunen and Ritsuko Ando; Editing by Tom Pfeiffer)

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