A temporary shutdown and reorganization petition filed by Finland's Talvivaara nickel mining company has brought predictions of its eventual bankruptcy.

Debt-laden Talvivaara Friday announced the temporary suspension of ore and metals recovery operations at its northern Finland site and a decision to file for corporate reorganization.

The halt in production took effect immediately and company Chief Executive Pekka Pera said its is expected to last a month, while the organization could mean layoffs or hourly cutbacks among its workforce of 570 employees.

Talvivaara is seeking short-term financing of $54 million from its stakeholders, which includes the government investment company Solidium -- a proposal that so far hasn't found any takers.

Finnish Minister of Economic Affairs Jan Vapaavuori called Talvivaara's situation "so critical that the firm's entire future can seriously be said to be hanging in the balance."

A bankruptcy declaration would eliminate 1,600 jobs from the production chain and would indirectly affect up to three times as many, Pera warned.

But Aalto University finance Professor Vesa Puttonen told Finnish broadcaster YLE Monday bankruptcy seems to be the most likely outcome of the crisis.

"It is very difficult to fully assess the situation as an outsider, but if you consider the number of problems faced by the 'patient,' I believe that bankruptcy is more likely [than a reorganization].

"Reorganization works best when the core business is profitable, but the balance sheet here is in debt. If there's a profitable core business, then the debts can be renegotiated."

Puttonen said that according to the company information made public, it was difficult to see how Talvivaara could increase profitability in coming years.

"In the same breath, I must say that on Friday, Talvivaara management was very positive and optimistic, but of course you have to understand that the role of the leadership is to be optimistic. If they don't believe in the business, they won't get the short-term financing, and so they won't even get into debt restructuring."

Talvivaara's nickel production has fallen far short of its goals. In 2011 it produced just more than 16,000 tons, well below its target of 30,000 tons. This year, production is likely to come in at less than 10,000 tons, YLE reported.

The main problem faced by Talvivaara -- which reported a quarterly loss of $40 million last month -- is low nickel prices.

Nickel miners are facing increasing pressure due to the falling prices, which have dropped from $8 per pound in February to just more than $6 per pound in July due to slack demand from alloy-makers.

Meanwhile, analysts predict production from nickel mines will likely outstrip global demand for a second straight year.

The Finnish daily Helsingen Sanomat, citing two independent sources close to the situation, reported Saturday Talvivaara's creditors are seeking Pera's ouster as chief executive as a condition for new financing.

If the company doesn't agree to meet the requirement to change its management team, it is unlikely obtain financing and a bankruptcy would be the result, the newspaper said, adding Pera refused to comment on the report.