Finland could buy shares in Talvivaara Mining Co. should the nickel miner beset by environmental issues and missed production targets sell equity.
“We haven’t given up hope on Talvivaara,” Kari Jaervinen, managing director of Solidium Oy, which handles the Finnish government’s equity investments, said in an interview in Helsinki today. “We of course have the ability to invest in Talvivaara. Should there be a rights issue, we’d certainly consider an investment.”
Talvivaara is considering ways to raise funds as it prepares to refinance 76.9 million euros ($103 million) of convertible bonds maturing May 20. Its options include debt, convertible bonds, royalty streams and equity, the company said in a statement yesterday.
Talvivaara, based in Espoo, missed its full-year nickel production target by as much as 56 percent. Output in 2012 was 12,916 metric tons, below the 13,000 tons estimated on Nov. 28. It had originally foreseen 2012 production of as much as 30,000 tons on Nov. 17, 2011. It produced 2,317 tons of nickel last quarter, less than the 2,500 tons projected in November.
The shares fell as much as 6.9 percent to 1.13 euros, declining for the sixth consecutive day. Talvivaara slid 5.7 percent at 3:06 p.m. in Helsinki.
Solidium, with 7.3 billion euros of investments, holds 8.9 percent of Talvivaara shares. It seeks to keep the stake at that level even after a possible right issue, Jaervinen said. The miner is struggling with the aftermath of a waste-water leak and plans to temporarily lay off as many as 230 workers due to a production halt that lasted for more than two weeks in November, it said yesterday.
Solidium has an optimistic view on the mining industry, despite recent “wrinkles” in the relationship, Jaervinen said.
“Nickel production in Finland should be a profitable and reasonable business in the future,” he said. “Our view on the industry is still positive in the long term.”