Westminer closes operations at Chibougamau

After months of attempting to cut costs, Westminer Canada, a unit of Australia-based Western Mining, has decided to close its two Chibougamau area mining operations. The closures, which occurred at the end of November, affect 350 employees at the Copper Rand and Portage mines.

With these closures, the Joe Mann mine, owned by Campbell Resources (TSE), is the only producing mine left in the Chibougamau area.

Tony Owens, Westminer’s vice-president of mining, told The Northern Miner that Westminer has been trying to reduce operating costs at the two mines for well over a year. Since 65% of the operating costs were labor-related, the company was seeking wage concessions from unionized workers to help reduce costs.

In return for wage conces-sions, the workers were of-fered a profit-sharing scheme. Unfortunately, the workforce declined to make concessions. Owens said that because of a failure to reduce costs and a review of its corporate objectives, Westminer has decided to close the mines permanently. Westminer acquired the Chibougamau mines in December, 1987, from Northgate Exploration for a reported $160 million in cash. Reserves at the two mines total about 3.9 million tons grading 1.72% copper and 0.093 oz. gold per ton. The two mines have similar production levels which total about one million lb. copper and 4,500 oz. gold per month. When the copper production is converted to a gold equivalent, production costs are in the range of $410-450 per oz.

Westminer has hired an investment banker to try to sell the mine properties. The company has indicated that should a buyer not be found, the properties would be returned to their natural state.

Even though the mines have been closed, Westminer is continuing its exploration efforts in the Chibougamau area.