STOCKHOLM, Sweden, July 06, 2005 (PRIMEZONE) -- Boliden has implemented planned maintenance shutdowns and has also suffered a num-ber of unplanned production stoppages in both the Product Segments Zinc and Copper in Q2 2005. The interruptions to production have both reduced revenues from concen-trate sales and treatment and refining charges, and increased costs. The operating result for the second quarter is consequently expected to be lower than that reported for Q1. Production returned to planned levels early in the third quarter.
Major maintenance shutdowns were implemented according to plan at the Ronnskar and Har-javalta copper smelters in the Product Segment Copper (which comprises the Aitik mine and the Ronnskar, Bergsoe and Harjavalta smelters). Production at the smelters was affected prior to the maintenance shutdowns by a number of disturbances and unplanned shutdowns, pri-marily as a result of greater than expected wear and tear to the smelting furnaces. This also had the effect of increasing the scale of the smelter maintenance shutdowns beyond what was previously planned. Both copper smelters are now producing at full capacity.
Boliden also smelts nickel at the Harjavalta smelter on behalf of its customers. The market is currently experiencing a severe shortage of nickel concentrate, and Boliden has consequently been forced to extend the planned shutdown in nickel smelting. The company does not antici-pate being able to restart nickel smelting until September.
Aitik has furthermore, like Tara, suffered a breakdown in the grinding mills involved in the milling process, resulting in approximately two weeks of reduced production levels.
As previously announced, grinding mills at the Tara mine in the Product Segment Zinc (com-prising the Boliden Area, Garpenberg and Tara mines and the Boliden Kokkola and Boliden Odda zinc smelters) suffered a breakdown, resulting in a fall of approximately 40 per cent in production over a six week period. Tara is expected to return to full production as of mid-July.
Other production units have, by and large, produced according to plan during the second quarter. Boliden does not believe it will be able to make up for the deviations from planned production levels that occurred during the second quarter in the remainder of the year.
Production has returned to planned levels early in Q3 and Boliden is of the opinion 1) that, de-viations from planned production levels in Q2 notwithstanding, the result after financial items for 2005 will exceed that for 2004, when an historically strong result was reported. A marked improvement in cash flow is also expected for 2005. Boliden's forecasts for 2005 are based on increased efficiency and its belief that the currently health market situation will continue throughout 2005.
1) The Board of Directors' forecast from 9th February 2005: The Board of Directors believes that the current healthy market situation will continue to prevail throughout 2005. Improvements in the underlying operations, increased synergies, healthy metal prices and higher treatment and refining charges will largely offset the effects of the rate of the US dollar. Bearing this in mind, the result after financial items for 2005 is expected to remain healthy and a sub-stantial improvement in free cash flow is also expected in 2005.
Appendix 1. Metal production, exchange rates and metal prices for Q2 2005.
Boliden is one of the world's leading mining and smelting companies with operating facilities in Sweden, Finland, Norway and Ireland. Boliden mainly produces copper, zinc and lead, as well as gold and silver. Other important operations include mineral exploration and metal recycling. The company has around 4,500 employees and net sales of almost SEK 18 billion. Its shares are listed on Stockholmsborsen's O-list and on the Toronto Stock Exchange in Canada.
This information was brought to you by Waymaker http://www.waymaker.net
The following files are available for download:
http://wpy.waymaker.net/client/waymaker1/WOLReleaseFile.aspx?id=113741&fn=wkr0001.pdf