Profits at Tara Mines up six-fold to €31.5m

PROFITS GREW almost six-fold at Tara Mines in Meath last year, as sales of zinc and lead soared by 23 per cent.

Accounts posted at the Companies Office show the business had revenues of almost €188 million last year, up from €153 million in the previous 12 months.

The increase came as prices for both metals remained steady, while Tara’s costs ticked up only slightly. Pretax profits came in at €31.5 million, compared to €5.4 million in 2009.

As in 2009, Tara did not pay a dividend to its Swedish parent, Boliden. A dividend of €188 million was paid in 2008.

Boliden has owned Tara, Europe’s biggest zinc mine, since 2004. The mine has been in production since 1977, with Tara expecting its reserves to last until 2019.

“While the outlook for the mine’s future remains positive, current global economic and market conditions require the group to remain focused on productivity and controlling its cost base,” Tara’s directors said in a report accompanying the accounts.

Shareholders’ funds at the end of 2010 amounted to €132.9 million, marking a rise of 12 per cent over the year.

The company employed 707 staff, ahead of 682 in the previous year. Employee costs, including pension costs, rose from €57.2 million to €58.5 million over the 12 months.

Tara operates five pension schemes, and saw its net pension deficit expand by almost one third to €46.2 million in 2010. In the accounts, the company said it expected to pay €7 million into the plan in 2011.

Tara’s pension provision attracted some controversy this year when it was proposed that scheme members would face a 10 per cent reduction in their annual pension payments as a result of a new Government levy.

The accounts also refer to the elimination of a potential legal exposure for Tara in a pensions dispute with a subsidiary company. The High Court rejected the subsidiary’s claim in 2009 and Tara won the case when it was considered again by the Supreme Court late last year.

Tara’s auditors noted in their report that they had been unable to audit the value of physical consumable stock at the end of 2009.