Mining tech firm Outotec warns on project problems, shares plunge
HELSINKI, Oct 26 (Reuters) – Finnish mining technology company Outotec said on Friday that it may have to cover costs after a smelter furnace it built for a client faced problems, sending itsshares down 28 percent.
Outotec which builds plants and equipment and provides services for the metal and mineral processing industries, said that it had faced problems in starting up a furnace at an ilmenite smelter ordered in 2012 and indicated it may have to rebuild the furnace.
If it transpires that responsibility for this incident rests with Outotec, then the cost for Outotec will be material and it will impact Outotec's 2018 adjusted EBIT
It did not name the project but in effect indicated that it concerned a furnace ordered by chemicals company Cristal Global in Saudi Arabia. Outotec has previously said that the value of the turnkey deal of the smelter with two furnaces was 350 million euros ($398 million).
"Both furnaces had their challenges during the original start-ups in 2015 and 2016. Furnace 1 was repaired and rebuilt, but during the ongoing start-up of the repaired furnace, there were problemsand the start-up operation was terminated," Outotec said in a statement.
Cristal was not immediately available for a comment.
Potentially rebuilding a new furnace would take approximately a year, Outotec said.
Shares in Outotec were down 28 percent at 3.455 euros by 0953 GMT, their lowest level since June 2016.
($1 = 0.8806 euros)
(Reporting by Jussi Rosendahl; Editing by Terje Solsvik and Susan Fenton)