Terrafame achieved its key targets during the company’s first year of operation 1.9.2016 15:41

The ramp-up of the Terrafame mine, located in Sotkamo, started a year ago as ore mining was recommenced on 1 September, 2015, after a near two-year pause. Despite the highly challenging outset, Terrafame Ltd. has achieved its key targets below the budgeted costs. These targets, set a year ago, have concerned stabilising the environmental situation and the ramp-up of the mining activities. Thus, Terrafame has good preconditions for commercially profitable mining.

  • During the first year of operation, nearly 12.5 million tonnes of ore have been mined, crushed, agglomerated and stacked on the primary leaching heaps.
  • The bioleaching process has worked as expected or even better, also during the winter frosts. Nickel solution has progressed better than expected in the first primary heap and, in the second heap, the solution has also progressed rather well. At the moment, more than 50 % of the primary leaching area has been built.   
  • The world market prices for Terrafame’s main products, nickel and zinc, have risen as expected during summer 2016.
  • It has been possible to decrease the amount of water at the mine from about 10 million cubic metres to about 6 million cubic metres by the end of August 2016. The amount of pregnant leach solution (PLS) stored in the pools has decreased to an optimal level, amounting to almost only one third of the amount year ago.
  • On average, 610 employees and 350 contractors (altogether 960 persons) have worked at the mine during the year.

Lauri Ratia, Chairman of the Board of Terrafame Ltd.:

“From both the national and local, Kainuu-centred perspective, the successful mining operations, as well as conducting them in a way that is safe for the employees and the environment, form a challenge that is crucial for us to overcome. Despite the relatively challenging outset, we have been able to get off to a good start with the production of the Sotkamo mine. We definitely owe the biggest thanks to our committed personnel and partners who have done their utmost to take the important first steps towards success.”

“During the year, we have mined, crushed, agglomerated and stacked nearly 12.5 million tonnes of ore on the primary leaching heaps. We have also moved approximately the same amount of ore to secondary leaching. Since September 2015, the dumpers – that is, the gigantic ore trucks – have on average transported one load of ore to the primary stack crusher every five minutes, around the clock, every day of the year, save for maintenance breaks.”

“In April 2016, we successfully moved the mining from the northern part of the mine to the middle quarry, enabling better cost efficiency. In the middle quarry, the nickel content of the ore is higher and the mining costs lower than in the very tight northern quarry, where we operated earlier.”

“The bioleaching process, which is vital for profitable mining operations, has worked even better than expected, also during winter frosts. Nickel solution has progressed better than expected in the first primary heap and, in the second bioleaching heap, the solution has also progressed rather well. The second heap was put into operation in spring 2016.

“Our target has been to increase the production volumes of nickel and zinc as the ramp-up has proceeded. In October 2016, our production will take a big leap forward as the other production line of the metal factory goes into operation. This will double the nickel and zinc production for the rest of 2016.”

The world market prices for metals have shown expected increase during summer 2016. Approximately one third of the mine’s revenue is generated by zinc, the world market price of which has climbed about 28 % year-on-year and is currently at about USD 2,300 per tonne. The price for the mine’s main product, nickel, has recovered from its worst downswing, reaching about USD 10,000 per tonne. This is the level at which the price was when Terrafame started its operations.

“With these metal prices, it is possible for the mine to achieve profitable operations in the long run. We monitor the average of the conservative price forecasts. Currently, the forecast is predicting that nickel prize will be more than USD 15,000 per tonne and zinc price USD 2,200 per tonne in 2020. This would make it possible for the mine to already operate very profitably.”

The water situation at the mining area has greatly improved in a year. By the end of August, the amount of excess water at the mine has decreased from about 10 million cubic metres to about 6 million cubic metres. The amount of pregnant leach solution (PLS) stored in the pools has decreased from about 840,000 cubic metres to 360,000 cubic metres, which is almost one third of the amount year ago. From the point of view of securing production efficiency and environmental safety, this is an optimal level.

During the summer months, we have been able to utilise the larger sulphate emission quota, granted for the summer period by the Vaasa Administrative Court. At the same time, the rainfall in 2016 has been considerably lighter than the year before. Moreover, water has evaporated effectively from the bioleaching heaps due to the effective bioleaching process. These factors have made the water situation much more manageable.”

“In the long run, Terrafame has good prerequisites for profitable operations, and this is supported by the results we have achieved during the first year. We will continue to work for the future success of the mine through all possible measures at our disposal.”

As stated by the Ministerial Committee on Economic Policy in May 2016, the finalisation of the ramp-up of Terrafame’s mine requires securing private financing by the end of 2016. The process to secure private financing is ongoing. Moreover, in accordance with the decision of the Ministerial Committee on Economic Policy, Terrafame is preparing a plan for the controlled shutdown of the mine. The ramp-up of the mine and the operations will continue as planned at least until the end of 2016.

Matti Hietanen, CEO of Terrafame Group Ltd.:

“Based on the results of the first year of the ramp-up, Terrafame has good prerequisites for commercially profitable mining. It is especially satisfying that the water management situation at the mine has improved substantially during the past 12 months. The excellent work at the mine is doing its part to support the negotiations for private financing.”

 

Further information and interview requests:

Terrafame Ltd.

Chairman of the Board Lauri Ratia, Tel. +358 50 2922

CEO Joni Lukkaroinen, Tel. +358 50 590 0720

 

Terrafame Group Ltd.

CEO Matti Hietanen, Tel. +358 40 823 8806

 

Terrafame Ltd. is a Finnish mining company producing primarily nickel and zinc by bioheapleaching at its mine located in Sotkamo. The aim is environmentally sustainable, safe and economically viable mining operations. Terrafame is owned by Terrafame Group Ltd., which is wholly owned by the State of Finland.

Article subjects: ProductionTerrafame