It is silent at the Kaunisvaara mine outside Pajala near Sweden’s northern border to Finland. Most workers are told to stop operations.
Troubled with financial problems since the start-up in December 2012, Northland Resources was forced to throw in the towel Tuesday morning after another period of deterioration in iron-ore prices.
The mining company says in a press-release that as a consequence of the Board of Directors’ decision to halt operations, the company is regrettably forced to give most of its employees a notice of termination. Discussions with the relevant labour unions have been initiated.
“Given the extremely challenging market climate, the Board’s decision to halt operations is at this stage the only way forward to avoid bankruptcy and the resulting value destruction, even though it still means that many skilled and committed employees will have to leave. All of our employees have worked hard to secure a viable future for Northland, and I am humbled by the dedication shown even in these challenging times,” says Johan Balck, CEO of Northland resources.
“Northland has been strengthened by the operational changes and cost-cutting activities performed in the past few months. However, the Company did not receive adequate support to access funds needed to continue operations. Given Northland’s extremely constrained liquidity, and the challenging market climate, the Board has decided to halt operations until conditions improve and a long-term solution has been secured,” says Olav Fjell, Chairman of the Board in a press-release.
The decision to halt operations is made in order to preserve liquidity and to allow for operations to be resumed when long-term financing has been secured. As a result of the operational halt, Northland will be able to continue working towards securing a long-term financing solution and try to finalize ongoing discussions with financial and industrial investors.