The future of Tara Mines in Co Meath remains under review despite its parent company, Outokumpu, reporting a 45 per cent increase in pre-tax profits yesterday. Tara Mines employs 628 people.
Mr Eero Laatio, managing director of the mine, said while it was making good progress, a continuing review was in place.
He said zinc prices remained very sluggish and they needed to rise to assist the Tara operation.
He said production would rise this year, but this was essentially a "recovery" situation after last year's stoppages.
While Tara is small by the standards of Outokumpu's other interests, it remains a major employer in the area, he acknowledged.
However, a sale of the mine could not be ruled out as the parent company has previously expressed a desire to exit from capital-intensive metal mining.
Historical over-production has caused zinc prices to tumble in recent years.
The falling price last year was among the reasons that workers were laid off at the mine.
Since then there has been some recovery, but the price is still considered low.
The strength of the euro against the dollar had also affected many companies in the sector, said Mr Laatio.
Outokumpu suspended production at the Tara zinc mine in November, 2001, due to the price, but also because of the mine's poor productivity.
A technical improvement programme was started last March and the nearby Bula ore reserves were acquired for a total purchase price of €37 million in August, 2002.
With no real signs of recovery in the world economy and the prospect of war looming, zinc prices are not expected to rise much over the next six months.
Despite the problems in the zinc industry, Outokumpu, which has interests throughout the metal industry, managed to double its net earnings to €159 million for last year.
The increase in net profit, from €76 million in 2001, was achieved with only moderate growth in turnover, by 4.4 per cent to €5.558 billion.
Pre-tax profit before exceptional items increased by almost 45 per cent to €213 million, it said, while operating profit increased at a similar rate from €183 million to €267 million.
Outokumpu said the positive results were produced because of rapid growth in the market for furnishings and other products made from inox, the group's core product.
In the third quarter of last year, the company bought Anglo-Dutch steel firm Corus's 23 per cent stake in AvestaPolarit, a joint venture between the two metal groups. Outokumpu funded this acquisition with a share offering. - (Additional reporting by Reuters)
