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No crisis funding for troubled Finnish mining company; restructuring to proceed

Eilís Quinn, Eye on the Arctic

The struggling Finnish mining company Talvivaara announced Thursday that stakeholders decided not to foot the $54 million bill for a company restructuring program.

However the company said that its current resources combined with cost-cutting and production-boosting measures should allow it to proceed with the corporate reorganization plan.

The Talvivaara mining company announced Thursday morning that it had received confirmation that it would not be receiving a much-needed infusion of about 40 million euros required for a proposed restructuring program to fend off bankruptcy.

The company said that “some stakeholders” decided late Wednesday that they were unable to offer any additional funding to bankroll the company restructuring process as well as new debt arising from filing for company reorganization.

The company speculated that its current cash reserves would last until the first quarter of 2014. However the company estimated that a program of enhanced productivity and reduced spending combined with its current reserves would allow it to complete the proposed corporate re-organisation program.

Talvivaara also reiterated its position that the restructuring option would leave a far less damaging footprint for the company, its employees and the environment than filing for bankruptcy.

“Bankruptcy proceedings would endanger the employment of the employees of the Talvivaara Group and of many of its suppliers and contractors,” the company said in a statement Thursday.

It added that the environmental impact of bankruptcy would be difficult to manage and that continued production at its Sotkamo mine in eastern Finland would provide the best avenue for water treatment and environmental cleanup efforts.

This story is posted on Alaska Dispatch as part of Eye on the Arctic, a collaborative partnership between public and private circumpolar media organizations.