Sydvaranger production uncertain beyond Q2

Mining will continue for another three months, but is uncertain after June.

Iron-ore miner in Kirkenes has secured finances for another three months period, but warns about closure after June if situation doesn’t improve.

Iron-ore price has dropped by nearly 50 percent in 2014, dramatically impacting mining companies in the Barents Region. 

Sydvaranger Gruve’s owner Northern Iron today issued an announcement to the Australian Securities Exchange where the company is listed. The update assures the shareholders that the company’s short-term financing arrangements are ok for the period April to June 2015.

Ore from Kirkenes is shipped to the markets by bulk-carriers like this one ready to sail to China.

This will sustain normal operations and the activities of the business during the second quarter, the announcement reads.

Northern Iron, however, underline that the work to improve the financial position will continue.

“This work has been initiated, but should such endeavours prove unsuccessful it is unlikely that Sydvaranger Gruve will be able to continue as a going concern in its present form beyond the end of the June quarter.”

Sydvaranger Gruve is not the only iron-ore miner in the Barents Region in trouble. In December, Northland Resources outside Pajala in northern Sweden field for bankruptcy. Rana Gruber in Mo i Rana, northern Norway had to sack 50 employees in late November. The largest iron-ore miner in the region, Sweden’s LKAB is also forced to cut staff after the company’s profit plummet by more than 90 percent in 2014, as reported by BarentsObserver.