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Trafigura acquires stake in Finnish nickel mine in $266 million deal

  • Region:

    Finland, Switzerland

  • Sector:

    Materials

  • Deal Size:

    $266 million

  • Buy Side Company:

    Trafigura
  • Sell Side Company:

    Terrafame
  • Target Company:

Commodities trader Trafigura said it will take a 15.5 percent stake in Finland’s Terrafame nickel and zinc mine as part of a $266 million deal, which will help the mine ramp up production. The mine in northern Finland has been under government control since 2015 following years of losses and production problems but returned to profit in the final quarter of last year, helped by a rebound in metals prices. It has been looking for new investors for some time. Trafigura will acquire the stake through its Galena fund and will also finance a new loan as part of the deal. As part of the arrangement, Trafigura agreed to buy all nickel deliveries and 80 percent of the zinc deliveries for seven years, a deal worth around 3 billion euros, Terrafame said. The mine produced 22,575 tonnes of zinc last year and 9,554 tonnes of nickel. Global zinc consumption is estimated at 14.5 million tonnes this year and nickel at around two million tonnes. The government took over the mine in 2015, and set up a company called Terrafame to build it up after production problems, environmental damage and weak nickel prices pushed former owner Talvivaara into a debt restructuring in 2013.

Tags:

Terrafame,trafigura,Mining,Nickel Mining,Nickel,Zinc Mining,Zinc Mine,Zinc,Finland,M&A,Mergers & Acquisitions