Boliden's Odde Expansion Delayed: Impact on Production Projections

Author: Dominic Sanders Updated: 09-12-2024 01:27 AM

Boliden's Expansion Project Overview

Boliden, a prominent company in the metal and mining industry, has been actively investing in the Odda zinc smelter since 2021. The primary goal is to increase the annual production capacity from 200 ktonnes to 350 ktonnes. While many of these investments have seen completion, unexpected delays have notably impacted the roasting facility. This situation has pushed back the expected ramp-up towards the new production level to the end of the first quarter of 2025.

Capital Expenditure Guidance for 2024 and 2025

Currently, Boliden's total capital expenditures are projected to be SEK 15.5 billion for 2024. Looking ahead, the budget for 2025 is set at SEK 13.5 billion. The adjustments reflect the additional costs incurred due to delays, particularly an estimated increase of EUR 100 million related to the roasting facility's construction.

Investment Details and Infrastructure Improvements

The commitment to upgrade the Odda facility encompasses crucial infrastructure enhancements. These include bolstering the electricity supply and quay facilities, alongside the construction of a new roasting plant and a sulfuric acid facility. Additionally, the leaching and purification plants are undergoing modernization, enhancing operational efficiency and expanding foundry capabilities.

Production Capacity and Economic Impact

With the original plan adjusted, the target of reaching a production capacity of 350 ktonnes will now unfold in a phased manner throughout 2025, marking a significant operational milestone. Notably, upon completion of these facilities, Odda's production capacity is anticipated to return to 200 ktonnes starting from the first quarter of 2025, due to previous limitations stemming from electrolysis capacities.

Financial Forecast and Returns

Boliden anticipates that these investments will yield approximately EUR 150 million in annual EBITDA, aligning with prior projections. These estimates are founded on Boliden's long-term price forecasts and reflect current market conditions, indicating a robust financial outlook as operations resume.

Conference Call and Further Engagement

A conference for press and analysts has been scheduled to discuss these developments. Boliden's President and CEO, Mikael Staffas, along with CFO Håkan Gabrielsson, will lead the session, which will delineate the strategic adjustments and their ramifications for the company's trajectory.

Frequently Asked Questions

What is the primary aim of the Odda expansion project?

The main goal is to increase the annual production capacity from 200 ktonnes to 350 ktonnes.

When will the ramp-up to the new production level begin?

The ramp-up is now expected to commence at the end of the first quarter of 2025.

How much is Boliden's capital expenditure for 2024?

The company's capital expenditure for 2024 is projected at SEK 15.5 billion.

What is the expected annual EBITDA from the Odda investments?

The investment is expected to generate around EUR 150 million in annual EBITDA.

Who can be contacted for more information about Boliden?

For additional inquiries, contact Klas Nilsson, Director of Group Communications, at +46 70 453 65 88 or via email at klas.nilsson@boliden.com.

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