As a result of the COVID-19 situation worldwide and the negative impact this will have on the Company's ongoing efforts, Sydvaranger has commenced a layoff process which will affect the majority of its employees.
Sydvaranger provided a project update in January, which advised a current focus on detailed engineering, planning and procurement works, with expectations for a start of operations to target 2021, while financing decisions regarding project funding were anticipated during the summer 2020.
Amid the ongoing crisis throughout the world, there are prevailing uncertainties impacting all of us. The global economy is hit hard by the virus with no clear signs of recovery in the near term. Despite the fact that the government has introduced immediate measures to mitigate the effects of the corona virus, there is considerable uncertainty in Norwegian business and it also affects the way we all work and interact. Across much of the world, companies are in a critical situation and must take extraordinary measures affecting plans for operations and employees.
Sydvaranger is in a challenging position and the future situation is both unclear and uncertain. Consequently, to secure the future, the Company needs to adopt a low cost profile going forward, while mapping a path through the ongoing situation and completion of the technical engineering works to support project finance. There are however real risks to Sydvaranger achieving full project funding within the timeline anticipated, which in-turn could lead to further postponement of start-up of operations.
The ongoing corona virus crisis has an enormous impact on the entire world economy and requires strong countermeasures. For Sydvaranger, this means that unfortunately it will not only affect the Company, but also the majority of employees that have supported building the foundations for the future. The permiterring process is expected to commence across the next week, while throughout, the Company has had and will continue to maintain, a close dialogue with representatives of the various unions.
Commenting on the situation, Peter Steiness Larsen, Executive Chairmans says:
“We have a very dedicated, committed and skilled team that has put in a great effort to bring us to where we are today. It has been a difficult decision to make and more difficult to pass on to our team; but with the uncertainties created by the corona virus, unfortunately we do not see that we have a choice.
The measures being taken now are aimed to secure the future of Sydvaranger to be able to withstand the current situation and proceed, as planned, to a sustainable start-up of long term operations. We sincerely hope that this should be a temporary arrangement and that we can welcome our team back in the near future.”