Dome cuts costs by 40% following bitter strike in 1990

In an extremely impressive turnaround, the Dome mine here of Placer Dome (TSE) has become one of North America’s lower-cost gold producers.

At a recent Chamber of Commerce seminar, Dome general manager Bob Perry said that the mine’s operating cost has dropped to an average US$228 per oz. That average is down dramatically from the US$378 the mine was incurring prior to the bitter, 6-month strike in 1990 by members of the local 7580 of the United Steelworkers of America.

“We’re breaking records all the time for production these days,” Perry told the business seminar. “Our workforce is smaller and we’ve increased our production.”

Dome’s mill is designed to handle an average capacity of 3,750 tonnes of ore per day. In February, the mill was processing as much as 4,500 tonnes per day for three consecutive days.

Not only is the Dome turning its operation upside down with a smaller workforce, Perry said Placer is considering the creation of a “super pit” that could extend the life of the mining operation by 17 years. “We’re looking at this concept right now and we hope we can pull it off,” Perry said.

The concept would involve expanding the mine’s existing pit — the larger pit would take in the ground currently supporting the building housing Perry’s office — should the feasibility study find the project economical. The general manager credits the mine’s turnaround to the drastic measures taken at the end of the 1990 strike. At that time, the mine laid off 365 union and non-union employees.

“Throughout negotiations, nobody seemed to believe us that if we were not a viable operation on our own then we would be down the tube,” Perry said. At the end of the strike, Perry said employees still on the job were given new marching orders, more contractors were hired and the mine began to train its employees as multi-skilled workers.

The result has been, that with half the workforce, the mine has increased its production and significantly lowered its costs.

The Dome mine, which started up operations in 1909, produced about 144,700 oz. in 1991, compared with 80,000 oz. in 1990 and 144,000 oz. in 1989.