* Shares fall sharply
* Market looks for production run-rate recovery -analyst (Adds share reaction, background on finances)
HELSINKI, July 2 (Reuters) - Finnish nickel miner Talvivaarasaid it would start talks towards cutting or temporarily layingoff up to 250 people, around 40 percent of its staff, to helpcope with weak nickel prices by reducing operating costs.
Talvivaara shares fell sharply after itsaid on Tuesday it needed to change its organisation.
Production glitches and weak nickel prices have raiseddoubts over the future of its Sotkamo mine, which was initiallyhailed for pioneering a cost-efficient extraction process calledbioheapleaching and has since been plagued with a major wastewater leak and halts to production.
"Cost cutting measures will be welcomed by the market,however the biggest driver to shares remains Talvivaara'sability to get back to a 30,000 annual production run-rate in H2following dewatering," Liberum Capital wrote in its daily miningreview.
The mine must now drain away waste water from previous leaksto reach full production. Talvivaara has estimated it willproduce 18,000 tonnes of nickel this year.
Its shares fell almost 8 percent in London and around 6percent in Helsinki in early trading.
Talvivaara was forced to raise 261 million euros ($340.2million) from shareholders in a rights issue earlier this yearto help keep the mine running.
In the first quarter of this year, it made an operating lossof 20 million euros.
($1 = 0.7671 euros) (Reporting by Terhi Kinnunen; editing by Jane Baird)
