Jobs to go as WA mine shuts

TWO big miners will close a joint venture mine in WA next month at a cost of 300 jobs, saying low prices and a higher dollar had cut profits. The shutdown by Teck Cominco and Xstrata Zinc of their Lennard Shelf Pillara lead and zinc mine in early August is likely to be permanent and will cause the loss of 300 jobs at the mine. ``The Pillara mine has become uneconomic, primarily due to the sharp decline in zinc and lead prices compounded by the appreciation in the Australian dollar,'' the Canadian and Swiss mining giants said in a statement today. ``Higher energy and labour costs and lower than planned production have also contributed to rendering the project uneconomic.'' The price of lead has fallen to about $US1,965 a tonne, from $US4,000 in October 2007, while the price of zinc has slid to $US2,005 a tonne, from $US3,800 a tonne in July last yearf. Commercial production at the mine began in the second quarter of calendar 2007. By the end of the year, the mine had produced 42,100 tonnes of zinc and 12,400 tonnes of lead. But that was about 18,000 tonnes of zinc and 2,000 tonnes of lead short of the joint venture's expectations, Xstrata Zinc Australia spokesman Patrick Collins told AAP. The plant and surface facilities at the mine will be placed on care and maintenance until a decision on the long term future of the assets and tenements is taken, the statement said. Mr Collins said the closure would be permanent because the quantity of remaining resources did not justify reopening the mine. ``The determination was that the remaining resources and the declining price means there is no justification in the long term to sustain the operation,'' he said. ``It has come as a surprise to some.'' The mine was operated by Perth-headquartered minerals explorer Western Metals Ltd until 2003 when it was purchased by Teck Cominco for $26 million, shut down and then placed in care and maintenance. The decision was made to reopen the mine in April 2006, with the expectation it had a mine life until 2011, Mr Collins said. The closure is not expected to have a material impact on earnings for either company. Mine development and exploration work has been suspended and existing contracts will be terminated. Mr Collins said the mine employed about 300 staff including contractors, who would be offered redeployment to Xstrata Zinc's other Australian operations. These include the McArthur River lead and zinc mine in the Northern Territory, and the Mount Isa lead, zinc, silver and copper mine in Queensland. ``Also, Xstrata Nickel in Western Australia aim to pick up as many people as they can,'' Mr Collins said. ``We have human resource professionals on the ground now with a view to offering redeployment. ``Quality people in the mining sector are highly sought after at the moment, especially with the boom in WA, and we at Xstrata want to support and retain as many staff as possible.'' Mining of drilled and broken ore stocks will commence today and continue until the end of milling operations. De-watering of the mine will cease following de-commissioning. Source: Perthnow