Record result for Canadian-owned mine in Finland
Copper brings big profits, union leader criticises sale of "national property"
The sharp rise in world market prices for metals brought a record profit to the largest underground mine in Finland.
Last year’s turnover for the Canadian-owned Pyhäsalmi copper, zinc, and sulphur mine was about EUR 130 million, of which nearly EUR 40 million was profit. In 2004 a turnover of EUR 70 million brought EUR 21 million in profits.
The Pyhäsalmi mine employs 214 people.
The mine is owned by the Canadian Inmet Mining Corporation, which bought it from Outokumpu three years ago. The mine has proven to be something of a golden egg for the Canadians. The ore is expected to last at least until 2016.
Teuvo Jurvansuu, the director of the Pyhäsalmi mine, attributes the record-high world market price of copper, EUR 4,584 a tonne in late December, to heavy demand for metal products and raw materials in China.
Inmet mining stock surged on the Toronto Stock Exchange last year from 15 dollars to 29 dollars a share. In addition to Finland, the company has mines in Canada, Turkey, and New Guinea.
"Inmet’s CEO Jochen Tilk is really pleased with the mine. With these prices, the purchase price that Outokumpu got has already been written off", says Jurvansuu.
Last year the Pyhäsalmi mine produced 600,000 tonnes of enriched sulphur, 50,000 tonnes of copper, and 70,000 tonnes of zinc. The sulphur is delivered to a fertiliser plant run by Kemira. The copper goes to Harjavalta, and the zinc to Kokkola.
After selling the Pyhäsalmi mine, Outokumpu also sold its zinc smelter in Kokkola, and its copper smelter in Harjavalta, as well as the Pori electrolysis plant to the Swedish company Boliden.
The Harjavalta smelter has been able to raise the prices of its copper products, while Boliden has decided to expand its smelter.
Already two years ago, Erkki Vuorenmaa, chairman of the Metalworkers’ Union, sharply criticised Outokumpu for selling off its copper operations. He remains critical of the sale of what he sees as "national property".
"No products have been invented that would replace copper, which means that demand is growing. Outokumpu made a mistake when it gave up copper to focus on steel", Vuorenmaa points out.
"Fortunately the buyer was Boliden, which is investing the money it has made from copper into the expansion of Harjavalta, because that company believes in Finnish know-how", Vuorenmaa adds.
Outokumpu CEO Juha Rantanen does not regret selling off the company’s copper operations. "We want to be the world’s best manufacturer of stainless steel, and giving up copper was part of this plan", Rantanen says.
The company has invested heavily into the Tornio steel mill, and Rantanen does not believe that it would have had the capacity to operate in many fields. He also expects Outokumpu to get through the current slump in demand for steel.
Previously in HS International Edition:
Outokumpu to cut up to 700 jobs in steel production (11.11.2005)
Helsingin Sanomat
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| 4.1.2006 - TODAY |
Record result for Canadian-owned mine in Finland
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