SWEDISH MINING group Boliden received a €118 million dividend from Tara Mines in Co Meath in 2008, the same year that it threatened to close the Irish lead and zinc mine if workers didn’t agree to significant cuts in their pay.
Details of the dividend payment are revealed in the accounts for Tara Mines Holdings Ltd and subsidiaries are likely to draw the ire of workers and their union representatives at the mine, who accepted pay cuts and changes to work practices earlier this year.
In 2007, Stockholm-based Boliden received a dividend payment of €97 million from Tara, a year when the mine recorded a pretax profit of €197 million.
This means that Boliden received €215 million in dividends from the mine in Navan over the two-year period.
Tara’s operating performance deteriorated in 2008 as prices globally of lead and zinc declined by up to 70 per cent and the dollar weakened against the euro.
Tara’s directors’ report states that “while the outlook for the mine remains positive, current global economic and market conditions requires the group to remain focused on productivity improvements and controlling its cost base”.
Tara’s turnover fell to €135.7 million last year from €333 million in 2007. The mine recorded a loss of €5.6 million in 2008, which was partially offset by a tax credit of €1.8 million.
Tara also recorded a loss of €59.8 million on its four defined-benefit pension schemes following an actuarial review of the schemes.
The company’s shareholders’ funds stood at €89.3 million at the end of 2008, compared with €256 million a year earlier. This movement reflects, in part, the effect of the dividend payment to Boliden.
The mine employed 679 staff in 2008, according to the accounts. They earned €45.5 million in wages and salaries last year, giving them average earnings of more than €67,000.
Tara opened in 1977 and is one of the biggest lead and zinc mines in Europe.
It is operating under a 35-year state mining lease granted in 1975. The accounts state that current reserves indicated a mining life through to 2018.
Tara’s pension scheme cost the company €6.5 million in payments during the year. There was a deficit in the scheme of €73.5 million at the end of the year compared with €17.7 million in 2007.
The accounts detail a legal spat between a subsidiary relating to pension enhancements negotiated by the subsidiary with its “active” workforce in 1999.
The claim was rejected by the High Court, but is being appealed to the Supreme Court. It could potentially cost Boliden €7.5 million.
The directors said they are confident the group has “no liability”.
