Nyrstar NV withdrew support for Talvivaara Mining Co.’s restructuring after negotiations to find funds for the Finnish nickel and zinc producer failed.
“Nyrstar decided to withdraw its formal support for the corporate reorganization process earlier this week,” the zinc smelting company said today in an e-mailed statement. “Nyrstar continues to believe in the long-term viability of the operations, and remains open to further assess viable options.”
Talvivaara, a supplier to Nyrstar, filed for a corporate reorganization on Nov. 15 to raise funds and avoid bankruptcy. The Espoo-based company has suffered from falling nickel prices and a slow ramp-up at its mine in northern Finland, forcing it to seek fundraising help from investors and creditors.
Nyrstar in 2010 agreed to pay $335 million for all of Talvivaara’s zinc concentrate until 1.25 million metric tons had been delivered. About 94,000 tons were supplied by the end of September, Nyrstar said this month. Talvivaara said Nov. 26 that the Brussels-based client had withdrawn its support.
“Nyrstar has engaged in ongoing discussions with Talvivaara and other key stakeholders over the past weeks with an aim of achieving a short-term funding solution for Talvivaara,” Nyrstar said today. “A satisfactory outcome of these negotiations was not reached.”
Talvivaara has until the close of business tomorrow to supply additional information in support of its application for restructuring, before a court in Espoo rules on the plan.
Talvivaara climbed 7.7 percent to 3.285 pence at the close in London trading, paring its loss this year to 88 percent. Nyrstar dropped 0.5 percent to 2.12 euros in Brussels.
Bankruptcy would result in 1,600 lost jobs, Talvivaara Chief Executive Officer Pekka Pera said Nov. 15. He declined to say whether the company had received or sought any acquisition approaches.
Talvivaara withdrew a 2013 output forecast of 18,000 tons in July after producing 4,508 tons of nickel in the first half. It produced 2,595 tons of nickel and 5,645 tons of zinc in the third quarter.