Ciarán Hancockon Zinc or swim for Irish metal mining; Takeover Panel's odd decision to take airline debate off air; big appetite for Irish food group
Outlook is the pits for zinc mining
IT LOOKS like a case of zinc or swim for the metal mining industry here.
Having once been among the world's biggest zinc producers, Ireland now faces a situation where all three zinc mines in the State could lie idle within a couple of years, placing hundreds of workers on the slagheap.
Accounts lodged recently for the zinc-producing mine at Galmoy in Co Kilkenny indicate why its parent, Lundin Mining, is winding down operations there.
Galmoy Mines Ltd's profit halved in 2007 to €21.9 million.
The gross value of metal sold by the company fell by 16 per cent to €122 million. When smelting charges and other deductions are subtracted, Galmoy was left with a turnover of €73 million, a fall of 23 per cent on 2006.
According to the accounts, the decline in zinc and lead prices since the end of 2007 would have knocked €14.8 million off the carrying value of Galmoy's mineral interests and would have resulted in an impairment of €15.5 million on its mill and mobile mine equipment had they been booked in that fiscal year.
Zinc prices have collapsed in recent years as global demand and economic activity has declined.
Prices now stand at about $1,200 a tonne, less than half what it was a couple of years back. This make it difficult to operate Irish zinc mines, given the high cost of production and the fact that our mines tend to be deep and hard to reach.
Tara Mines's Swedish owner, Boliden, has threatened to close its Navan mine unless workers agree to hefty cost cuts, while rumours are circulating in the industry that Anglo American has drawn up a wind-down plan for its large zinc mine at Lisheen, Co Tipperary, which is reported to be losing money.
Ireland's heyday as one of the world's biggest producers of zinc appears to be nearing an end.
The only chink of light is at Pallas Green in Co Limerick, where two potentially large deposits are being surveyed.
Both of these, however, are some years away from being exploited.
Blocking TV debate on Aer Lingus is bizarre
SUCH IS Ryanair’s propensity for litigation these days that news of another legal challenge to a decision affecting the airline generally elicits nothing more than a yawn.
Yet Ryanair's decision to challenge the Irish Takeover Panel's "direction" that Michael O'Leary not participate in a head-to-head debate with Dermot Mannion on RTÉ's
Prime Timeprogramme on Tuesday night is worth attention.
To recap, the Takeover Panel blocked the debate at the last minute on the basis that it breached its rules. It wouldn't even warm to the idea that the chief executives be interviewed separately by Prime Time.
Not that these objections were aired publicly by the takeover watchdog. We had to be told that by RTÉ and the airlines. The Takeover Panel doesn't return calls from journalists and keeps its public statements to a minimum.
Ryanair's legal adviser, AL Goodbody, believes the panel's decision was a "misinterpretation" of the rules, hence the legal challenge.
Why, we wonder, were O'Leary and Mannion allowed, in the run- up to Christmas, to go before the Oireachtas committee on transport and talk ad nauseum on Ryanair's €748 million takeover? Both bosses were chaperoned by advisers, as they always are in these situations, just to make sure they didn't say anything they shouldn't.
Perhaps Takeover Panel chief Micheál Ryan was afraid that Michael O'Leary might say something rude, given that the show was to be broadcast after the watershed, or perhaps he was concerned that a tearful Dermot Mannion would look directly into the camera and tells us that he never asked for a golden parachute (payment) and that he would have been happy to make do with the ones offered under your seat in economy.
The reality of such a debate is that the pair would probably have had a bit of a ding-dong on a number of issues that have already been well aired and well rehearsed by both sides.
The rules governing takeovers are obviously there for a reason and should be observed. This ruling, however, seems bizarre and the panel's stance seems somewhat outdated when you consider the multitude of multimedia platforms now open to both Ryanair and Aer Lingus to put their cases to stakeholders.
Then again, the Takeover Panel's decisions are often curious. At 2.23pm on December 23rd, just as everyone was about to break up for Christmas, it published its decision in relation to the allegation of concert-party trading between Philip Lynch's Moonduster and UK investment fund Arkaga in relation to the takeover battle for Irish Continental Group (ICG) in 2007.
Its decision not to hold a hearing into the matter left a lot of people connected with the ICG saga scratching their heads, especially given the details that had leaked out in the preceding months.
Whatever about the ICG case, blocking the airline debate just wasn't cricket. We all have an interest in Aer Lingus's future ownership, not least because the taxpayer is a 25 per cent shareholder and want to hear what Mick and Dermo have to say on the matter. As Capt Jean-Luc Picard used to say to his Star Trek crew: "Make it so."
US has big appetite for Irish food group
CONVENIENCE FOODS group Greencore seems to have generated considerable interest in the US last week at a Davy-hosted investor conference which featured a number of other Irish listed companies.
According to a Davy note this week, Greencore is "meaningfully engaged " with four of the top-10 US retailers in the "food on the go" space.
Greencore is the world's biggest sandwich maker and also produces a long menu of ready meals, cakes, water and other convenience grub. Its US subsidiary, Home Made Brand Foods, which it acquired in April 2008 for about $54 million (€41 million), is performing ahead of expectations, with sales growth accelerating. It supplies chilled convenience products.
Expansion with existing customers Stop Shop and Hannaford continues, with 580 stores expected to be served this year in the US northeast.
Greencore also has a 10-year licence with Weight Watchers and this range will be launched in the coming weeks in 400 stores.
Greencore said its target was to build a $750 million business in the US by building regional scale over the next five years.
However, this failed to add bite to Greencore's share price, which has largely flatlined since the start of the year at just under €1. Its shares traded above €4 for much of the early part of 2008.
The US also featured in Glanbia's pitch to investors.
Glanbia chief executive John Moloney said demand remained strong at its US cheese division.
The Kilkenny-based company is considering a 50 per cent increase in capacity at its processing plant in New Mexico, which is jointly owned with a co-operative of local farmers and only opened for business in 2006. The expansion would be funded by the joint venture company itself.
