Xstrata Says Demand Collapsing, 686 Jobs Lost – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of Mining.com permission to post Bill Bradley’s article. www.northernlife.ca

The global economic meltdown is now biting Greater Sudbury. Gone for good are 686 full-time jobs at Xstrata Nickel, after the company announced a major restructuring of its Sudbury operations.

“Demand for our product has collapsed,” said Marc Boissonneault, vice-president Xstrata Nickel, Sudbury on CBC Radio One, Monday morning.
“We can’t carry on business as usual.”

As a result, the following will occur:
– 686 permanent employee positions will be made redundant, affecting both union (600) and salaried (86) employees;
– three-day shutdown will take place immediately to implement restructuring and talk to employees;
– 300 employees will be moved to the higher-value Nickel Rim project, displacing some contractors;
– Fraser Mine will be placed on care and maintenance for now;
– accelerated closure of Craig and Thayer-Lindsley operations;
– Strathcona Mill will be reduced from four shifts to two;
– Fraser Morgan development project will be deferred to be evaluated and possibly re-initiated.

“Our leadership team is taking proactive and decisive measures during challenging times. The continued decline of the economic environment and deteriorating commodity markets, coupled with high operating costs, particularly at our older mines, are negatively impacting our Sudbury operations,” said Ian Pearce, Xstrata Nickel chief executive.

The announcement does not impact the world class Nickel Rim South project.

“The project remains on schedule to ramp up to 60 per cent of its ultimate 1.25-million tonne per annum production capacity in 2009, equivalent to approximately 7,400 tonnes of nickel,” said a release from the company.

“Nickel Rim South will become a low-cost, cornerstone operation in Sudbury, generating annual production of approximately 18,000 tonnes of recoverable nickel by early 2010,” the release continued.

The company has invested $627 million for the project’s first phase, which came in on time and on budget. The remaining $300 million for the completion of mine development and infrastructure has been approved.

Last week new Mine Mill and Smelter union president, Dwight Harper, said the company was marshaling all its resources for its new development projects like Nickel Rim South.
Boissonneault said that the early retirement package offered to employees, and accepted by more than 200 helped avert even more layoffs. He said on CBC Radio One that there would not be another early retirement offer given at this time.

“We gave a very generous package. There was a high acceptance rate. We have done as much as we can,” he said.
Union layoffs were governed by the collective agreement and staff cuts were decided upon by the skill levels and transferability of individuals affected.

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