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British investment company to purchase troubled Finnish mining operation

Xinhua, March 13, 2015 Adjust font size:

British investment company Audley Capital Advisors LLP (Audley) has tabled a conditional offer to acquire the assets of the beleaguered Finnish mining company, Talvivaara.

The assets on sale are Talvivaara's nickel mining operations in Sotkamo, eastern Finland. Talvivaara Sotkamo Ltd filed for bankruptcy in November, 2014 and the Finnish government is currently the biggest owner.

The government has entered into agreement with Audley via its wholly-owned company Terrafame, which was founded in February this year to handle Talvivaara's restructuring and find a new owner for the mining company.

According to the agreement, Audley will be the primary investor and operator with an 85 percent stake in the new mining company, and Terrafame will own the remaining 15 percent.

The purchase price was not disclosed. The deal is expected to be completed this summer.

Finnish Economic Affairs Minister Jan Vapaavuori said the agreement was an important step, but there were still uncertainties concerning the completion of the transaction.

"If completed, the deal signed with Audley will provide sufficient financing to develop the mining operations," said Vappavuori.

"We are convinced that Talvivaara can be developed into a profitable business which will make a meaningful contribution to the Finnish economy," said John MacKenzie, who is from Audley and in line to be the CEO of the new mining company.

Terrafame and Audley plan to inject over 200 million euros (about 212 million U.S. dollars) into restarting the mining operations, according to the Finnish government.

Founded in 2004, Talvivaara is a nickel mining company in Finland. Since it began mining operations in 2008, it has been troubled by heavy financial losses, crushing debt, and serious leaks causing environmental damage.

Talvivaara applied for bankruptcy last autumn, as no solution was reached in the short-term financing negotiations. Since then, the Finnish government has been trying to seek a new owner for the company to continue the mining operation in Sotkamo. Endit