Updated at 1:56 p.m.: KGHM International confirmed Tuesday it has eliminated 20 positions at its Victoria project in Sudbury, and suspended some contracts.
“As a result of the decision to revise the Victoria project’s schedule due to the unfavourable macroeconomic situation on the metals market, the decision was made in March to optimize the employment structure of the Victoria project to adapt it to the project’s tasks which are planned in 2016,” said KGHM spokesperson Galina Meleger, in an email to NorthernLife.ca.
“This process will enable the project to optimize its activities in 2016 and at the same time will ensure maximum organizational cost efficiency.”
KGHM International is expected to provide an update on its Victoria Mine project in Sudbury later today, said a company representative.
NorthernLife.ca received emails last week from sources close to the mine that as many as 50 workers involved with the project have been laid off, and the company is shutting down “a good chunk” of the operation.
After numerous calls the Polish miner would neither confirm nor deny reports of layoffs at the mine site.
In its consolidated annual report, issued Friday, March 18, 2016, the company said about the Victoria Mine project: “Due to the current macroeconomic situation, the Management Board of KGHM Polska Miedz S.A. decided to modify the adopted schedule for the project.”
The mining company (formerly FNX) signaled in its consolidated annual report it intends to reduce its copper production in the next year.
KGHM posted a loss of US $1.3 billion at the group level in 2015.
“The past year was a period of increasing challenges on the international commodities market,” KGHM board president Krzysztof Skóra said in a note to investors. “These challenges were largely due to falling commodities prices caused by unfavourable macroeconomic conditions. Also of significance was, among others, the economic slowdown in China and the record low oil prices.”
In an email to Northern Life.ca Myles Sullivan, area co-ordinator with the United Steelworkers Local 2020, said there have been no layoffs that have affected United Steelworkers members with the company.
While the United Steelworkers represent workers at the majority of KGHM's Sudbury operations, they do not represent employees with the Victoria project.
In February 2015 Trevor Eagles, KGHM's manager of engineering in Sudbury, said the Victoria project was on schedule to complete a mining shaft by 2019.
In 2014 KGHM completed timbering at the site, located about two kilometres south of the historic Victoria Mine, which was first developed in the 1890s and then closed in the 1920s.
The former Inco reopened the mine in the 1970s, and made a deal with KGHM's predecessor, FNX, in 2002, to take control. A long and thin ore body – about 50 kilometres long – was discovered in 2010, which the company wanted to bring into production.
The company has reported measured, indicated and inferred mineral resources at the Victoria site are estimated at 13.6 million tonnes of ore, with average grade of 2.6 per cent copper, 2.7 per cent nickel and 8.3 grams per tonne of associated metals.
KGHM has gone back and forth on whether it should build one or two shafts at the site.
In October 2015 KGHM put its McCreedy West nickel mine in Levack into care and maintenance.
The mine's closure displaced 25 United Steelworkers members, who could apply for jobs at the nearby Morrison Mine – also part of the Levack complex – but would in turn displace workers there with less seniority.
In addition to layoffs at the McCreedy West Mine, 15 workers at Morrison also lost their jobs.
NorthernLife.ca will provide more information as this story develops.