Royal Oak takes tough stand on Giant strike

Recently Royal Oak Mines (TSE) mobilized a team of contract miners to replace striking workers at its Giant mine near Yellowknife, N.W.T. — an unusual move in the industry.

As might be expected, the first group to arrive at the mine site had to elbow through angry union members waving picket signs. The Canadian Association of Smelter and Allied Workers (CASAW) Local No. 4, which represents the bargaining unit at Giant, went on strike May 23 after its membership rejected a tentative agreement unanimously recommended by its bargaining committee. About 80% of the mine’s 230 union members voted against the offer.

“It was a package of monetary and non-monetary concessions,” scoffed union Vice-President Harry Seeton. “They (Royal Oak) are bringing in American-style management to try and bust the union.” Seeton said the monetary issues involve changes to overtime pay requirements and withdrawal of bus transportation, while other non-monetary benefits and rights would be lost through “change in contract language.”

But Royal Oak President Margaret Witte said the agreement was “fair,” considering the weak gold market, and contained an escalator clause giving union members significant wage increases tied to the future price of gold. “Miners at Giant are some of the best paid in the industry making an average of $77,000 per year with the highest paid in 1991 making a total of $132,000,” Witte said. “The industry and gold prices are depressed, and if our hourly workforce does not realize these facts, there are unemployed miners all over Canada who will be taking these jobs.”

The company is continuing operations with a mix of contract miners, staff and non-striking hourly workers, and expects to continue operation at close to design tonnage during the dispute. A production loss of about 2,500 oz. is expected in this quarter, but Witte thinks the lost production will be made up in the third and fourth quarters.

“The company is taking an aggressive stand on these labor issues to firmly control operating costs thus ensuring that Royal Oak Mines remains profitable at a time of depressed gold prices,” Witte added.

Royal Oak produced 54,492 oz. gold at an average cash production cost of US$298 during the first three months of 1992, an improvement from the 48,298 oz. produced at an average cash cost of US$325 per oz. in the comparable 1991 period. The company — which stands out for its low overhead and ability to use financial markets to improve its bottom line — posted net earnings of $5.6 million for the 1992 first quarter, compared with $3.7 million in the year-earlier period.

The company has another gold mining operation at Timmins, Ont., and recently purchased the Hope Brook mine in Newfoundland which it hopes to bring back into production this summer. This acquisition is expected to boost the company’s annual gold production to 320,000 oz.