Trafigura, a multinational commodity trading company based in Geneva, Switzerland, has acquired a 15.5 per cent stake in Terrafame, a Finnish state-owned mining company, as part of a 250 million euro funding arrangement.
The arrangement will enable the long-troubled nickel and zinc miner to continue ramping up its operations in Sotkamo, North Ostrobothnia.
Matti Hietanen, the chief executive at Terrafame, believes the financing package proves that the mining company has all the prerequisites to continue its operations in a financially sound and environmentally sustainable manner.
“After a thorough global financing round we have now reached an arrangement with Trafigura and [its investment arm] Galena, who will bring additional industry-related commercial and technical expertise to Terrafame,” he says in a press release.
The Finnish Government has injected almost 500 million euros in Terrafame since establishing the special-purpose company to take over the mining operations after the bankruptcy of Talvivaara in mid-2015, reminds Kauppalehti.
Prime Minister Juha Sipilä (Centre) underlines that the funding arrangement is also in the best interests of the Government, not least due to importance of the mining operations for the economy and employment situation in Kainuu.
“A decision to shut down the mine would have depleted state coffers by 300–400 million euros in addition to the earlier investments. The [pre-transaction] valuation of the mining company is shows that the state funds invested in Terrafame have not been wasted,” he writes in his blog.
“We made the decision and it was the right one,” he adds.
The pre-transaction valuation of Terrafame was roughly 380 million euros.
Trafigura is responsible for what has been described as one of the worst environmental disasters of the 21st century, reminds Kauppalehti. A cargo ship leased by the commodity trader dumped tonnes of toxic waste in Abidjani, Ivory Coast, in 2006, allegedly causing as many as 100,000 people to seek medical attention and 17 to lose their lives.
The cargo ship was supposed to unload the waste earlier in Amsterdam, but local port authorities noticed a foul smell emanating from the cargo and, after conducting further analyses, concluded that disposing of the waste would have required a more thorough and expensive disposal process.
The cargo was consequently transported to Ivory Coast, where a local company offered to dispose of the waste at a lower cost.
Trafigura settled a class-action lawsuit brought against it in Ivory Coast reportedly for 30 million pounds.
Mika Lintilä (Centre), the Minister of Economic Affairs, stated in a press conference on Friday that the past transgressions of the Trafigura are deplorable, but reminded that the commodity trader will not be responsible for the day-to-day operations of the mine.
“Terrafame will remain responsible for the mining operations,” he said according to Helsingin Sanomat.
Aleksi Teivainen – HT
Photo: Kimmo Rauatmaa – Lehtikuva
Source: Uusi Suomi