Shares in Boliden plunge as Swedish mine hit by seismic activity

(Sharecast News) - Swedish metals, mining, and smelting group Boliden saw its share price drop by nearly a fifth on Thursday after the company slashed output targets at its Garpenberg project by 70% due to "abnormally high seismic activity". Boliden said seismic activity had already impacted operations at the project in Hedemora during the first quarter, with throughput at under 0.8m tonnes instead of the 0.9m+ tonnes expected.

While inspections are continuing, the affected areas of the mine are expected to be out of action for the rest of the year.

While much of the mine infrastructure, such as crushers, hoist systems and workshops, have been mostly unaffected, facilities such as ventilation, pressure air systems, water management, electrical infrastructure and backfill paste have been damaged and will need to be renovated.

For safety reasons, the "major damage" incurred at the upper parts of the Lappberget ore body - the dominant ore body of Garpenberg - means mining there is not expected to be possible again in 2026.

Other mining positions in Lappberget and the two other ore bodies of Garpenberg have been unaffected and production can continue in the second quarter.

However, as a result, Garpenberg's production is now predicted to be just 30% of the 3.7m-tonne guidance. What's more, first-quarter results will see a hit to profits of SEK400m (£32m).

Garpenberg is home to zinc, copper, lead, gold and silver deposits. Average grades for zinc are expected to deteriorate slightly, while the reverse applies to the silver grade, Boliden said.

Boliden's shares were down 18.2% at SEK480.30 by 1104 GMT.