The Finnish government may double its stake in troubled nickel producer Talvivaara, according to reports Friday.

Minister Heidi Hautala said the Finnish state's interest in the company could be increased to about 18%, along with its commitment to subscribe shares in the miner's rights issue.

"If... other shareholders would not use their right to subscribe shares, it
(the government stake) could increase to somewhere around 18%,"
Hautala told the parliament on Thursday, according to Reuters.

Her remarks come after shareholders last week agreed to stump up €261m to keep the Finnish firm's mine running and help it recover from a costly waste water leak in November.

Shareholders backed a discounted share sale to bring the Sotkamo mine back to normal production this year. The company said it would issue up to 1.6bn new shares to existing shareholders at €0.16 each, a markdown to the current price of around €1.05.

Talvivaara's shares retreated in Friday morning trading as hard times continued to hit the miner. The value of its shares has fallen by over two-thirds over the past year.

The company reported an operating loss of €57m in the fourth quarter as a result of the waste water leak along with series of production disruptions including the death of a worker and excess rain water that forced it to halt ore mining and crushing in September.

RD

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