Base metals producer Talvivaara Mining has posted an operational update disclosing that it may temporarily lay-off as many as 230 employees for up to 90 days following adverse impacts on production caused by a gypsum pond leakage.

The lay-offs may start as soon as Thursday and the company said it was engaging on 'co-operation consultations' with staff to minimize the negative impact of the potential measures.

Nickel production stood at 2,317 tonnes in the fourth quarter of 2012, whilst full year nickel production totalled 12,916 tonnes.

Pekka Perä, Chief Executive Officer of Talvivaara, commented: "Our team has mobilized very effectively and has worked extremely hard to mitigate the impact of the gypsum pond leak on our operations and the environment as much as possible.

"Some of the results of this hard work are beginning to show in the stability and availability of the metals plant, which has been operating to encouraging levels over the past few weeks. We are putting a lot effort on the comprehensive water balance management measures and enhancing bioheapleaching performance. This work has progressed well, but it will take some time for the full benefits to be realized.

"Challenges remain over the next few months. Due to the water balance we may temporarily have to lay off a number of our employees whilst mining activities remain suspended during the first half of the year. Every effort is being made to provide full support to all our employees and minimize the negative impact of these potential measures.

"To achieve this, we are working very closely with employee representatives as part of a comprehensive consultation process. We have every confidence that the measures we are taking to preserve the long term financial stability of the Company will be of short duration and that we will be able to return to a sustainable ramp-up path towards full capacity during the second half of this year."

Talvivaara's primary focus is on nickel and zinc and it uses a technology known as bioheapleaching to extract metals out of ore. Bioheapleaching makes extraction of metals from low grade ore economically viable.

MF

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