Latest retrenchments a huge blow
Wednesday November 12, 2008
In response to the continued deterioration of metal prices CBH Resources will this week retrench half of its Endeavor Mine workforce.
The retrenchments are the result of a change in mining operations to a continuous day shift roster and plans to only operate the surface processing plant 9-10 days per month.
CBH’s managing director Stephen Dennis announced the decision last Friday.
“Currently prices are below the operating costs for a significant proportion of the world’s zinc producers, including Endeavor,” Mr Dennis said in a company press release.
“Regrettably the lower production rate at Endeavor will necessitate a further reduction in manning levels, with the current workforce to be reduced to one half of its current size (i.e. from 233 to 115).”
Mayor Lilliane Brady, state Member for Barwon Kevin Humphries and federal Member for Calare John Cobb have all expressed their extreme concern at the effect the announcement will have on the town.
Mr Humphries said while he understood Endeavor’s difficult position, it was regrettable for the town.
“The only way Endeavor can ride this out is to cut costs—not an enviable position.
“It’s inevitable that there will be a knock on effect in the community.
“This will have an impact on school numbers, local spending and no doubt general services within the town, very disappointing,” Mr Humphries said.
Cr Brady commented that the town has weathered previous retrenchments at the mine earlier in the year, however she and Mr Humphries agreed this time was different.
“Previous reductions were very much contractor based, but these redundancies are affecting employees and their families that have made Cobar their home,” Mr Humphries said.
Mr Dennis said the new mine plan is expected to generate a significant improvement in Endeavor’s overall cost position.
“Under the latest revision of the operating plan, ore production in 2008/09 will reduce from 940,000 tonnes to 658,000 tonnes,” he said.
The plan also allows the mine to “ramp up” production if zinc prices improve.
“The combined average lead zinc (Pb/Zn) mine grade will progressively increase to 13 per cent by June next year and grades will increase further to 14 per cent in 2009/10 as higher grade stopes are accessed.
“There will be no change to Endeavor’s published mining reserve,” Mr Dennis said.
“However, the life of the mine will be extended at these lower mining rates.
“This reduction in ore throughput and metal output will also ensure the value of Endeavor’s mining reserve is maximized by preserving it for when metal prices improve,” he said.
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