Boliden's Aitik Mine Faces Production Challenges Amid Diorite Deposits

Boliden, Europe's No. 3 zinc and copper producer, is facing production challenges at its Aitik copper mine in northern Sweden. The mine, which began a new pushback in 2024, is encountering difficulties due to high deposits of the very hard rock type diorite. This hard rock limits the grinding capacity, leading to reduced production rates. Additionally, the oxidization of the ore has a slight negative effect on recoveries. As a result, the production rate for the first quarter of 2025 is estimated to be just over 9 Mtonnes, significantly lower than the previous year's production rate.

The diorite deposits are expected to continue affecting the production process in Aitik for the remainder of 2025. Consequently, Aitik's total production in 2025 is estimated at close to 40 Mtonnes, which is lower than the previous year's production. The copper grade is estimated to remain at 0.16%, in line with the previously communicated figures.

The reduced production rate in Aitik is expected to impact Boliden's overall financial performance in 2025. The mine is one of Boliden's largest and a significant contributor to its overall production. The hard rock deposits of diorite may also result in higher costs for grinding and processing, further impacting Boliden's profitability.

Boliden plans to mitigate the challenges posed by the hard rock type diorite deposits in Aitik by submitting additional permit applications for further raising of the tailings dam in 2025. This will provide the required capacity for the Life of Mine Plan and enable conversion back of the 20 Mtonnes of material that had been downgraded to Mineral Resources in 2023. This will increase the Mineral Reserves by 15 Mtonnes (19%) and the Mineral Resources by 15 Mtonnes (9%).

The potential long-term effects of the diorite deposits on Aitik's production and Boliden's mining operations are significant. The hard rock nature of diorite limits the grinding capacity, which can lead to reduced production rates. The oxidization of the ore can negatively affect recoveries. These challenges are expected to continue throughout 2025, which could result in lower production rates and potential delays in the mine's expansion plans. The impact on Boliden's overall operations may include reduced copper output, which could affect the company's financial performance and market position.

Investors should closely monitor Boliden's efforts to mitigate the challenges posed by the hard rock type diorite deposits in Aitik and the company's overall strategy to address the potential long-term effects on its mining operations.