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Mine jobs to go

Thursday, 10th March, 2016

By Andrew Robertson

Battling miner Perilya is poised to reduce its 400-strong local workforce and cut production in response to low metal prices and an under performing southern operation.

In a widely expected move, company secretary Paul Marinko yesterday revealed that a proposed restructure would be presented to Perilya’s board on March 21 that would “likely result in some level of redundancies”.

He said the changes were necessary because the company was losing money due to weak base metal prices and the mine’s inability to consistently meet production targets at the ageing southern operations. 

“What we hope to get is an improvement in the cost per pound of zinc that we produce,” Mr Marinko said. 

“We’ll be looking for something that allows us to operate longer than we can under the current plan and hopefully profitably.”

He would not say how many jobs were likely to go as a result of the restructure, which will be the first major shake-up at the mine since Perilya sacked 440 workers in 2008.

But he said the losses would be spread across every section of the operations’ 400-strong workforce. 

At least some jobs are expected to go through voluntary redundancy, with the company calling for expressions of interest from workers, who have until Monday to respond.  

“We can’t guarantee it (because) obviously operational requirements will come first, but we will certainly try and accommodate those wishing to take one,” Mr Marinko said.

He said management would work the voluntary redundancies into modelling it had already done and “then if the board makes a decision we can respond very quickly”.

“If we get approval to do anything then we will act straight away; we’re losing too much money to delay those sorts of decisions.”

Management has been working on restructure plans “for some time” according to Mr Marinko, who described the decision to sack workers as “terrible” but necessary. 

“I’ve been through it before and families are affected, people are affected; there’s nothing nice about it.

“But it’s about survival. I try to look at it as trying to preserve as many jobs as we can and, if we make the right decisions now, then we can do that and save jobs, and hopefully down the track we can re-employ a number of those people.”       

He said shutting down the mine down remained an option for the company but would be a last resort.

“With an old mine like Broken Hill, if you close it it’s very, very unlikely it will ever reopen again.

“So what we’re looking at is whether, as a smaller operation, we can achieve the models we want; you combine that with the potential to open the North Mine and then you get some genuine extension of the southern operation.”

The company views the North as critical to its long term future in Broken Hill and is working with the government to try and fast track development approval. 

The CFMEU has said previously that before any changes are made that affect the workforce Perilya must first consult with workers as per the enterprise agreement.

Mr Marinko said the company had been discussing its problems with low metal prices and achieving production targets with employees for some months.

“We’ve been consulting with our workforce since last October in detail around this. 

“Everyone’s intimately aware of the difficulties the industry is facing as a whole and the southern operations in particular.

“So we’ve certainly been consulting and again this is a last resort but you need to try and run the operation at the most optimal level to preserve its life.”

He also said Broken Hill wasn’t the only operation that was experiencing some pain. The company’s mine in the Dominican Republic last year cut operating costs by over 30 per cent.

“These things that we’re doing we’ve been doing across the group.

“So it’s not just Broken Hill that’s targeted; unfortunately this is industry-wide and worldwide, and we’re responding accordingly.”

Mayor Wincen Cuy yesterday said news of the impending job losses was “disappointing” but not be unexpected.

“We have been told year upon year that mining will come to an end in Broken Hill and the longer the mining goes on, the closer we are to probably the end.”

The mayor, who was briefed about the planned changes by Perilya on Tuesday, said the city “really needs to look at where we go into the future”. 

“This is why this Council over the past three years has constantly said that we need to be looking at how we do thing, how we operate; not only as a council but ... as community moving into the future.”

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