June 17, 2015 / 8:31 AM / 4 years ago

Finland to inject more funds into troubled nickel mine

HELSINKI, June 17 (Reuters) - The Finnish government plans to inject a further 112 million euros ($126 million) into restructuring troubled nickel mine Talvivaara after a potential buyer failed to arrange financing, a minister said on Wednesday.

Talvivaara’s listed parent company is going through debt restructuring while its key subsidiary, which owns the mining assets, last year applied for bankruptcy protection following a drop in nickel prices, repeated production disruptions and environmental damage.

The government funding to create a new company around the mine follows a previously promised 97 million euros.

It said it was continuing negotiations with British investment firm Audley Capital Advisors, which in March signed a conditional agreement to buy the key assets of the mine, as well as other parties.

“To secure binding financing has so far proved very difficult due to many reasons, including the mining sector’s tough market situation,” Minister of Economic Affairs Olli Rehn told a news conference.

He added that the government was also preparing to close down the mine in the north of the country if a commercially viable solution cannot be found. If that happened, the funding would be used to cover the costs.

According to the initial plan, a consortium led by Audley was aiming to take a 85 percent stake in the mine while the Finnish government would have taken 15 percent. ($1 = 0.8878 euros) ($1 = 0.8861 euros) (Reporting by Jussi Rosendahl; Editing by Keith Weir)

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