November 16, 2012 / 2:41 PM / 7 years ago

Finnish officials say Talvivaara plant still a risk

HELSINKI, Nov 16 (Reuters) - A metals recovery plant in eastern Finland run by mining group Talvivaara still poses an environmental risk even though it stopped leaking waste water two days ago, government officials said.

Talvivaara is awaiting approval to restart production at the plant, near the town of Sotkamo, which has been offline since the leak was found on Nov. 4, costing the company an estimated 1 million euros ($1.3 million) a day.

The company said earlier this week the leakage had been stemmed, but environmental minister Ville Niinisto said on Friday the government was still worried about whether the company could properly clean up the damage at the plant.

“The acute leakage is under control, but I’d stress that remarkable risks still remain,” Niinisto, also leader of Finland’s Green party, told a news conference.

“The waste waters at the safety dams might bring more heavy metals and uranium to the environment,” Niinisto said.

Niinisto said local authorities had been given a bigger workforce to oversee the situation at the mine and the company was obliged to strengthen its own surveillance.

Finland’s Safety and Chemicals Agency had earlier said Talvivaara must provide a more detailed evaluation of future risks, and a senior official said the plant was unlikely to restart on Friday.


Economy minister Jan Vapaavuori from the right-leaning National Coalition party said the incident was “sad and revolting” and had posed a “severe environmental problem.”

“I’m very worried because the mining sector is one of the few areas in this country with possibilities to create new jobs in Finland,” Vapaavuori said.

Pekka Pera, founder and top shareholder in the company, returned on Thursday to his role as chief executive to lead the company’s recovery from the disaster which he said would cost several million euros.

Some analysts said the company is losing around 1 million euros every day the plant remains offline and will need new financing soon.

Shares in the company rose 2.9 percent to 1.32 euros in Helsinki by 1337 GMT, extending a bounce since dipping to 1.08 euros earlier this week.

But some analysts said Pera’s return did not necessarily mean and end to problems at the mine, which has been hit in the past year by production disruptions, environmental problems and a worker fatality.

“The stock is a gamble at the moment, there are very few fundamentals to lean on,” said Jari Raisanen at Pohjola Markets.

Analysts also noted authorities had adopted a tough stance against the restart of the plant due to the strong public reaction. ($1 = 0.7817 euros) (Editing by David Holmes)

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