Tara Mines benefits from higher prices

TARA MINES returned to the black in 2009 as higher lead and zinc prices boosted revenues by 13.3 per cent.

Latest accounts for Tara Mines Holdings Ltd, show that the company made a pretax profit of €5.4 million in the year to the end of December 2009. This compared with a loss of €5.1 million in 2008. Tara paid €1.8 million in corporation tax to bring its total profit for the year to €3.6 million.

Turnover at the Meath mine amounted to €153 million, up €17.5 million on the previous year.

In its auditors report, Ernst Young stated that, in relation to “consumable stock”, which has a carrying value on the books of €6 million, it was unable to observe the counting of physical stock. “We were unable to obtain sufficient appropriate audit evidence regarding the stock quantities by using other audit procedures,” the report added.

The auditors also highlighted a potential exposure for Tara concerning legal action relating to a pension scheme.

This involves a dispute with a subsidiary company dating from 1999 relating to pension enhancements negotiated by the subsidiary with its workforce.

In 2009, the High Court rejected a claim from the subsidiary but this ruling has been appealed to the Supreme Court. If it loses this case, Tara Mines Holdings Ltd’s liability is estimated at €8 million. The directors said they are “satisfied” it has no liability.

No dividend was paid by Tara to its Swedish parent group Boliden. This contrasts to the €188 million dividend paid in 2008.

Tara’s wage bill in 2009 rose to €49.1 million from €5.8 million in the previous 12 months. The company employed an average 682 staff during the year.

Tara’s 35-year state mining lease expired in 2010 but was renewed for one year. “The directors are of the view that the licence will be extended for a period that will at least cover the remaining useful life of the mine,” the accounts add.