Opening of Ranua's palladium mine postponed

Strong euro and low price of palladium diminish feasibility of operation

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The opening of a palladium and platinum mine in Ranua's Suhanko in Northern Finland will be delayed. The project will also be downsized.
      Managing director Howard Stevenson of Arctic Platinum, a subsidiary of the South African Gold Fields mining company, emphasises that the company's Thursday press release on the postponing of the opening of the mine does not mean the project has come to an end.
     
"The situation with the world economy has drastically changed within the past twelve months and is now very much against this project", Stevenson says. "But Gold Fields has some 90 million dollars invested in this venture and is not about to write off that sum."
      Stevenson emphasises the strategic importance of Suhanko's palladium deposit as the only one of its kind in Europe.
      In its interim report, Gold Fields reveals that realisation of the Suhanko mine would not be profitable at present.
      The Arctic Platinum company continues operating from its office in Rovaniemi, where it employs a score of people.
      The main reasons for the postponing of the operation are the decline in palladium's world market price, the strengthening of euro against the US dollar, the increase of capital costs, and the falling of the precious metal content of the deposit to 1.9 grams per ton from the previous estimate of over 2.0 g/t.
     
Based on the feasibility study prepared during the first quarter of the year, the company is not interested in furthering the Suhanko project as a large-scale investment.
      Currently there are talks of downsizing.
      The company also continues cooperation negotiations with possible new partners.
      "But at the moment it is impossible to predict when the world economic situation might change in such a way that even a smaller-scale project would be profitable", Stevenson says.
     
High hopes have been pinned on the mine project, particularly in Ranua but also in the neighbouring Rural Municipality of Rovaniemi and the City of Rovaniemi. Previously the company announced that around 700 workers would be needed for the initial construction phase, while 350 to 400 employees would then see to the day-to-day operation of the mine.
      Ranua municipal manager Kimmo Sarapää still dares to be hopeful as the company has not pulled out.
      "The company has made land deals in the mining area, it is about to obtain a permit to establish a mining district, the environmental permit should be granted in July, and in Germany there is now talk of equipping future diesel engines with catalytic converters", Sarapää lists.
      One of the primary uses of palladium is in car catalytic converters.
     
The Finnish government has granted EUR 3.5 million for the construction of a road that will lead to the border of the mining district.
      The mining company will have to finance the actual construction of the road, but the government will make up for the cost after the mine has been in operation for two years.


Links:
  Gold Fields
  Ranua
  Arctic Platinum to be shelved or downscaled (MineWeb)

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