Terrafame to cut jobs due to difficult market situation

State-owned mining and multi-metal company Terrafame has decided to initiate change negotiations concerning the entire personnel on production-related and financial grounds, said the company in a press release on Tuesday.

The negotiations will affect all the 826 employees of the company and according to the initial estimate, the maximum personnel reduction need would be in total 75 person-years.

The possibility of layoffs, changes to job descriptions, and shifting to part-time work is also considered in the negotiations.

In 2024, Terrafame’s business environment has continued to be difficult, mainly due to the slower than estimated progress of the electrification of mobility, especially in Europe, as well as the clearly lower market prices of metals and battery chemicals compared to the previous year.

The company estimates that the battery chemicals market will continue to be challenging in late 2024 and early 2025.

In addition, Terrafame expects the Vaasa Administrative Court to make final decisions on two permits in 2024. If said decisions were to be delayed, the previous interim decisions by the Vaasa Administrative Court could impact the company’s production and net sales.

“The battery chemicals market in particular has continued to be challenging, which has been reflected in the demand for Terrafame’s products and thereby in our net sales and profitability. At the same time, Terrafame is currently implementing the largest investment programme of its history regarding, among others, the new secondary leaching area needed for bioleaching. To improve the company’s profitability, in early 2024 we initiated a profitability programme aiming for EUR 10 million in annual savings, which has progressed as planned. In spite of the positive development of our cost efficiency, we are now forced to initiate change negotiations due to the continued challenging operating environment,” said Seppo Voutilainen, Chief Executive Officer of Terrafame.

“Despite a temporary market downswing, the electrification of mobility is inevitable. Terrafame is a significant part of the European battery value chain, and we believe in the demand for battery chemicals in the longer term. Our strength is the flexible production process, which enables selling our nickel product as an intermediate when the battery chemicals market does not meet the expectations,” Voutilainen added.