The strong recovery in the zinc market, where prices have risen to $1,150 (€1,095) a tonne from $915 in January, is likely to continue and be a positive factor for Arcon International in the second half of the year, according to its chairman.

Mr Brendan Gilmore said continued strength in America, stronger demand in Europe and a recovery in Asia had helped to lift future price forecasts for all commodities. In addition, the consolidation in the aluminium and copper industries had helped to restore interest in the commodity sector in general. "All of these points, allied to a stronger dollar, should be positive for Arcon in the second half of 1999," he said.

Arcon, 44 per cent-owned by Dr Tony O'Reilly, processed 300,000 tonnes of ore from its Galmoy mine in the first half of 1999, yielding more than 59,000 tonnes of concentrate for shipment to European smelters. Twenty shipments totalling 58,000 tonnes were made, in line with the group's expectations.

The full six-month production at Galmoy meant that turnover, net of smelting charges, more than doubled to £9.6 million (€12.2 million) while there was a swing from an operating loss of £1.6 million in the first half of 1998 to a breakeven scenario.

The interest charge was marginally higher at £2.38 million and after-tax losses fell from £3.6 million to £2.4 million.