TALV.L Share News (TALV)

* To lay off 230 employees for up to 90 days * Should restart ore production by end-June * Still considering refinancing options * Shares down 6.4 percent (Adds analyst comment, shares) HELSINKI, Jan 16 (Reuters) - Finnish nickel miner Talvivaara, whose ore production has been suspended sinceSeptember, is to lay off 230 workers temporarily, sayingconditions at its site remained challenging. Talvivaara's mine in Sotkamo, eastern Finland, was hit by aseries of problems last year, including a worker's death, a leakof toxic waste water in November, and the suspension of oreproduction following flooding after several months' heavy rain. Ore production should restart by end-June, Talvivaara saidon Wednesday, adding it was still reviewing refinancing options. Analysts expect the company to sell new shares to help keepit afloat - around 85 million euros ($113 million) in bonds needto be repaid in May - and pay for the leak's clean-up. "We are expecting the company to announce a stronglydilutive share issue in the early part of this year," FIM saidin a note to clients. Talvivaara shares were down 6.4 percent at 1140 GMT. Workers will be laid off for up to 90 days because of thehalted production. Talvivaara pioneered the use of bacteria to extract nickelin a process known as bioheapleaching. Evli analyst Antti Kansanen said the company needed to showbetter management of water balance and improvements inoperations to persuade investors that bioheapleaching works. Talvivaara said it spent 13 million euros ($17 million) inthe fourth quarter cleaning up after the toxic water leak. It estimated it will spend around 17 million euros this yearto improve its water treatment system. Talvivaara said it would give a production forecast for 2013when it publishes fourth-quarter results on Feb. 14. ($1 = 0.7492 euro) (Reporting by Terhi Kinnunen; Editing by Hans-Juergen Peters)