Management of Royal Oak Mines (TSE) is showing no signs of backing away from the use of replacement workers to continue production at its Giant gold mine near Yellowknife, N.W.T.
President Margaret Witte told shareholders at the company’s recent annual meeting that 125 miners have already been brought in, mostly from Newfoundland, to replace workers who went on strike after rejecting a new contract offer in late May.
“The labor situation at Giant was out of control,” Witte said, adding that the company’s actions will ultimately allow it to better manage the mine. “Gold prices are low and companies that don’t control labor costs will be out of business.”
Witte said Royal Oak’s original offer was rejected because previous management had traditionally always given more “at the 11th hour.” A mediator has been appointed to try and resolve the dispute, but Royal Oak recently rejected a proposal from Local No. 4 of the Canadian Association of Smelter and Allied Workers which represents the bargaining unit at Giant. “A 10% wage increase retroactive to last March is simply not in the cards,” Witte said.
She expects the strike at Giant will result in the company reporting a loss for its 1992 second quarter. The mine is operating at capacity, but production is being interrupted by a series of power outages caused by damage from rocks etc., which also interrupts power service in Yellowknife. As well, Royal Oak operates a gold mine at Timmins, Ont., and recently reopened the Hope Brook mine in Newfoundland which it acquired earlier this year in a transaction valued at about $8.8 million.
Royal Oak’s three operating divisions are expected to produce a total of 320,000 oz. gold annually.
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