Xstrata threatens to axe jobs if Garrett stalls on mine...

Xstrata threatens to axe jobs if Garrett stalls on mine decision

http://business.theage.com.au/business/xstrata-threatens-to-axe-jobs-if-garrett-stalls-on-mine-decision-20090116-7j86.html

Ben Sharples

January 17, 2009

XSTRATA says it will be forced to axe 300 jobs and shelve the McArthur River zinc mine if an immediate decision on the operation is not made by Environment Minister Peter Garrett.

Xstrata warned yesterday that stockpiles of zinc-lead ore at the mine in the Northern Territory would be gone by January 26.

Mining and civil works at the mine came to an end on December 17 after the Full Bench of the Federal Court upheld an appeal against a judgement in June.

The judgement by Justice Mansfield was that a decision by Mr Garrett to approve a controversial open-cut expansion was invalid because of procedural errors by the Federal Government.

"If we do not have a decision by the Federal Government on whether we can continue mining at the McArthur River mine by that date, we will unfortunately have no other option than to lay off 300 workers and suspend all operations," Xstrata Zinc Australia chief operating officer Brian Hearne said in a statement.

Mr Hearne said the company had assessed potential options for redeploying McArthur River staff but the outlook was grim for workers if the mine was not given the go-ahead.

"Realistically, we've just had cutbacks at Mount Isa and we had cutbacks earlier in December at McArthur River to streamline the operation," he said.

"We can't mine blue sky and the minister needs to make an urgent decision."

Xstrata rechannelled a 5.5-kilometre section of McArthur River in 2008 as part of the conversion of the mine from an underground operation to an open cut. The company said it had complied with a request from the Federal Government to supply the necessary information from its approval process immediately following the court decision.

Xstrata said the next step was for Mr Garrett to consider all the relevant information and make a decision about the mine's future.

Mr Garrett said that he was intending to make a fresh decision on the mine's expansion.

"I am moving as quickly as possible to make a new and legal decision to give Xstrata certainty regarding its future operations," he said.