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Government confirms plans to sink 112m more in Talvivaara

Economic Affairs Minister Olli Rehn confirmed Wednesday that the government is proposing putting an additional 112 million euros into the Talvivaara mining group. The minister's comments followed reports by the daily Helsingin Sanomat that the state needed to fork out more money because the proposed new owners of the mining group haven’t been able to come up with all the cash needed for the investment.

Kaivinkone lastaa louhetta kuorma-autoon avolouhoksessa.
Tänään kokoontuva ylimääräinen yhtiökokous päättää Talvivaaran omaisuuserien, kuten kalkkilaitoksen ja laboratorion myynnistä Sotkamon kaivoksen nykyiselle haltijalle Terrafamelle. Image: Talvivaara

Speaking during a mid-morning press conference, Economic Affairs Minister Olli Rehn said that the additional amount of 112 million euros would ensure a commercially profitable solution for the mining company’s current situation. He added that the goal would be to get the mining operation back on its feet during the summer.

"The Finnish government’s goal is a commercially viable solution and we are still actively aiming for such an outcome. This means that Talvivaara’s funding and ownership structure should be finalised during the summer… so that quarrying at the mine can begin before the autumn. This supplemental budget proposal also anticipates closing down the mine at the state’s expense," Rehn told reporters.

Earlier in the day Helsingin Sanomat quoted an anonymous source who said that government’s proposed additional funding is meant to help secure the purchase of its mining operations by proposed new owner Audley Capital Advisors.

HS: Additional funding to secure purchase deal

The government will table the second supplementary budget for 2015 in parliament today. The paper said that the government will propose the additional funds be directed to Terrafame, the special investment company set up by government to oversee the reorganisation of the beleaguered mining company. The government had previously decided to set aside 97 million euros to cover the restructuring process.

Terrafame has been in discussions to sell the company’s mining operations to the British investment firm Audley Capital Advisors.

According to the HS report the government has decided to put up more funding for Talvivaara, because the investment firm has not been able to raise the cash required to purchase the mining operations in Sotkamo.

That deal also required the government to stump up some of the financing required to finalise the sale. However the additional funds are not to be used to cover the costs of the mining concern’s bankruptcy proceedings.

In May Yle reported that Audley Capital Advisors was having trouble coming up with the money to purchase the Sotkamo mine. At the time Yle sources indicated that the company had proposed that the government should shoulder the full responsibility for resuscitating the mine.

Initial estimates had put the cost of reviving the mining operations at a minimum of 200 million euros.

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