Vale freezes hiring – by Carol Mulligan (Sudbury Star – September 13, 2012)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Just weeks ago, Vale Ltd. was advertising to hire 400 new employees at its Canadian operations. Today, a hiring freeze is in effect at Vale operations worldwide — including Sudbury — while the Brazil-based miner deals with “challenges” associated with a huge drop in commodity prices.
 
Peter Poppinga, chief executive officer of Vale Canada Ltd. and executive director of its base metals operations, wrote to top-level managers last week, saying Vale base metals leaders are reviewing “every aspect of our business as we speak.”
 
In an email obtained by The Star, Poppinga tells top-level managers the key to short-term and long-term stability is to “reinvent, reshape and turn around” the business.
 
Poppinga stressed safety must always come “at the forefront,” but he said high-level executives are examining performance across all operations — looking at Vale’s ability “to deliver and be competitive, placing renewed emphasis on value over volume.” The company will have to make some “tough decisions,” said Poppinga, which will be announced in the next four to six weeks.
 
Vale Sudbury spokeswoman Angie Robson confirmed there is a hiring freeze in Sudbury, as the review at base metals operations is conducted.
 
“We expect decisions on impacts, if any, to our Sudbury operations will be made within the next four to six weeks,” she said.
 
Meanwhile, Vale will continue to “do what we can to control costs and improve efficiencies, which is good business in all price cycles, but especially so in the current economy,” said Robson.
 
In his email, titled “Vale: A Message from Pete,” Poppinga pointed out the price of nickel has fallen 17% this year, 30% since August 2011 and 50% since November 2006, when Vale acquired Inco.
 
The spot price for copper is the lowest in three years, he said.
 
The company is investing more heavily in base metals than it ever has, but challenges are being posed by mines “where depth and distance from shaft are increasing and grades are decreasing.”
 
He closes his email by saying the business is c yclical — “we’ve been here before, we’ve made the tough calls, we’ve persevered and we’ve prospered. I expect us to do it again.”
 
Poppinga didn’t address the low price of iron ore, Vale’s biggest commodity. It has dropped from $198 a ton to less than $100 a ton in a couple of months.
 
Parent company Vale SA has making news for weeks in stories about it selling some of its ships and its stock price falling and rising.
 
Bart Melek is head of commodity strategy for TD Securities. He will address the Sudbury Area Mining Supply and Service Association at a breakfast meeting Monday.
 
Melek said he never comments on companies’ individual performances. But he offered a forecast for some of the metals produced in Sudbury.
 
For the rest of this article, please go to the Sudbury Star website: http://www.thesudburystar.com/2012/09/13/vale-freezes-hiring

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