Nickel and zinc miner Talvivaara said heavy rainfall in the third quarter is proving a major obstacle in its aim of mining 17,000 tonnes of nickel this year.
The Finnish group produced 4,030 tonnes of nickel in the third quarter, taking the year to date total to 10,598 tonnes. Although third quarter production was an improvement on the second quarter output of 3,194 tonnes of nickel, the unusually high level of rainfall this year - some 45% above the long term average - means the group is going to have to go some to hit its full year production target for nickel.
The group said fourth quarter nickel production is expected to improve on the third quarter level.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The group has around 1.7m cubic metres of excess water accumulated at its Sotkamo mine, which is being temporarily stored in the open pit. Draining of the pit started in September and is expected to take two to three months.
The excess water in circulation has continued to dilute metal grades in leach solution. During the quarter, the average nickel grade in solution pumped to the metals recovery plant was 1.5-1.6 gram per litre (g/l) compared to slightly below 2 g/l at the start of the year.
The unusually high water content in the nickel heaps has also been found to affect leaching by reducing the efficiency of aeration. Measures to improve aeration are being taken, and Talvivaara expects to see moderate improvement in the leach solution grades during the remainder of 2012, but a complete reversal of the impact is unlikely to be achieved before the year-end.
Zinc production in the third quarter climbed to 7,184 tonnes from 6,686 tonnes in the second quarter, and brought year to date production up to 21,760 tonnes.
JH
-
Most expensive street in Britain to buy on has houses with '£10m average asking price', Rightmove findsNews Rightmove found Buckingham Gate, close to Buckingham Palace, was the most expensive street in the country. Do you live near one that's been included on the list?
-
Smaller companies: starting to turn?The long-awaited turnaround in smaller companies is unlikely to happen just because shares are lowly-valued. However, an improving economic and interest rate backdrop could spark renewed interest in the sector. M&A activity is also providing support for the smaller companies sector
