Sierra Rutile to restart Area 1 operations
ASX-listed Sierra Rutile on Tuesday announced the planned restart of Area 1 mining operations, pending a contract for additional power generation capacity and assuming that a new fiscal regime is in place.
Earlier this week, the government instructed Sierra Rutile to restart operations at Area 1 by the end of May, claiming that the company had violated the Mines and Minerals Development Act by suspending operations early this year.
Sierra Rutile reiterated on Tuesday that it did not agree with the government’s view that it had breached the Mines and Minerals Development Act when it stopped mining operations last year.
Sierra Rutile and the government have been in negotiations since May 2023 regarding a new fiscal regime for Area 1 under a third amendment agreement. in January, Sierra Rutile issued a suspension notice after the government stated that the third amendment agreement would no longer apply to the company, reverting instead to the fiscal regime in place as at November 20, 2001. The miner argues that this change renders any ongoing operations in Area 1 economically unviable.
Sierra Rutile said the restart decision was based on the assumption that the third amendment agreement continued to apply for the remaining production from the existing Area 1 operations.
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