Tara Mines is to buy an ore body for €35 million to extend the mine's life, Tara’s Finnish owners Outokumpu said today.
Production at Tara, Europe's biggest zinc mine, has been suspended since November last year due to weak markets, but the company today reiterated its earlier announced plans to restart mining in September.
Outokumpu said in a statement that acquiring the Bula ore body, which adjoins the Tara property, and completing a southwestern expansion would "significantly enhance the value of the Tara mine."
It would buy the ore body from the receivership of Bula Limited. "The Bula resources and ore reserves are estimated by Tara to be in excess of eight million tonnes, grading 10 per cent zinc and two per cent lead. Further verification drilling is required," it said.
Outokumpu had said in early June that it would reopen the mine, which has an annual production of almost 200,000 tonnes, in September as it expected the zinc market to move back into balance towards the end of the year.
Zinc is used largely to galvanise iron and steel. Prices for the metal have been slowly crawling their way back from last year's 14-year lows. The low price has prompted one European producer, Metaleuro, to end production of primary metal at one of its French plants.
Outokumpu spokesman Mr Eero Mustala said the company still aims to sell Tara as part of its move to quit capital-intensive base metal mining but was in no hurry to seal a deal and no discussions were ongoing.