September 26, 2008 / 10:04 AM / 11 years ago

UPDATE 2-Ireland's Galmoy zinc mine to begin phased closure

(Adds union and management quotes, detail)

By Kevin Smith

DUBLIN, Sept 26 (Reuters) - The Galmoy zinc-lead mine in Ireland, owned by base metal producer Lundin Mining (LUN.TO), will begin a three-year phased shutdown in December, a union spokesman said on Friday.

The mine, which produces about 70,000 tonnes of zinc metal and 19,000 tonnes of lead metal a year, employs 221 people and will shut down completely in 2011 when the mine reaches the end of its natural lifespan, the Services, Industrial, Professional and Technical Union (SIPTU) said.

Following overnight negotiations with management on a compensation package, SIPTU spokesman Denis Hynes said it was a sad day for Galmoy’s miners, who had been hoping the life of the mine could be prolonged.

“It was being mooted last night that they could probably mine ore for 10 more years — there is still more there but it would cost too much to get it out of the ground,” he said.

“It really is all over and it may even close a lot sooner than 2011 if the price of zinc drops.”

Swedish-Canadian group Lundin said last year that unless a significant new ore deposit was found, 2011 would be the final year for Galmoy, in the southeastern county of Kilkenny.

Galmoy Managing Director Stefan Mansson said the mine had already gone past the 10-year horizon envisaged when it began operations in 1997.

“We’ve stopped exploration because we’ve done all it is reasonable to do in this area,” he told Reuters.

“If the price of the metal drops and your costs are too high you can’t continue — that’s normal in mining.”

The price of zinc, used to rust-proof iron and steel, has fallen sharply this year on growing oversupply.

Output at Galmoy, was hurt last year by a pay dispute which led to a series of “go-slows” by workers.

Editing by Christopher Johnson

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