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KGHM cuts 87 jobs at Sudbury mine

Slumping nickel prices will mothball Morrison Mine this spring
KGHM Morrison Mine
KGHM is cutting 87 jobs from its Morrison Mine project in Levack, putting the mine into care and maintenance.

KGHM, a Polish-owned nickel and copper mining company, has announced it will be cutting 87 jobs this spring from its Morrison Mine in Sudbury, Jan. 16. Low nickel prices are being blamed.

The announcement from United Steelworkers Local 2020 comes just a week after the mining company announced 22 were being laid off at the mine on the north end of the Sudbury basin.

The union said the job cuts mean the mine will be going into care and maintenance mode. A skeleton crew will remain on site, dewatering and doing necessary repairs to the shaft until the mine reopens. 

No timeframe for the shutdown has been given.

Morrison Mine is located 45 kilometres northwest of Sudbury, in the outlying community of Levack.

Myles Sullivan, area coordinator for Northeastern Ontario for Steelworkers Local 2020, who represents the affected workers, said the latest round of cuts will take effect in late March.

“I really feel for these folks. This includes management at the company as well,” he said in an interview.

“Some of these included retirement packages, but for many, this means they have to look for work, and those kinds of jobs are not in Sudbury. This could mean a major change for their families.”

This also means the KGHM bargaining unit is also being cut to about 100 people. To put that into perspective, when nickel prices were high, the bargaining unit was around 500.

Steve Dunlop, general manager for KGHM's Sudbury operations cited low nickel prices in a statement, which have been hovering around $5 USD per pound for months. It added that the decade-long down cycle has affected several other local operations.

“This is not an easy situation for the employees and families impacted,” says General Manager Steve Dunlop, “We are a small company and we all know each other quite well. This announcement hasn’t been a surprise for many of our people as this is a cyclical industry and we have been openly working with them on solutions to our financial challenges at Morrison – but that certainly doesn’t make this any easier. We were really hoping the mining sector would have recovered by now.”

He stressed they are giving their employees a large lead time to allow them to consider their options, adding they have worked with the union on this to save as many jobs as they could and protect the health and safety of workers.
"We are not just locking the doors and telling everyone to go home, we want our employees to stay safe and try to help as much as we can," Dunlop said.

Dunlop said the company will be transferring some staff to its McCreedy West Mine on the southwest outskirts of Levack. Dunlop said it contains more precious metals and the company will be focusing on that market for the time being. 

Sullivan remains optimistic there will be a rebound in nickel prices in the near future. But until then, the industry will simply have to shoulder the slump in metal prices, which translates to production cuts and job losses.

In the meantime, he said the Steelworkers are asking those affected workers to keep safety in mind as they work for the next two and a half months.

“We know it's a lot to carry on their minds, knowing they have to find jobs again. But we want everyone to get home safe at the end of the day."

According to the KGHM website, the mine originally opened in 1915 and extracted nickel, copper and some precious metals from two shafts, Levack and Craig, until it closed in 1997.

KGHM acquired it in March 2002 and renewed production five years later. Exploration was carried out on the acquired property that resulted in the discovery of the Morrison deposit, rich in polymetallic ore with high-grade copper, nickel and precious metals.