Newcrest confirms Telfer redundancies

NEWCREST Mining has confirmed rumours of impending job cuts at its copper-gold Telfer mine in Western Australia, with the exact number of redundancies being finalised.
Newcrest confirms Telfer redundancies Newcrest confirms Telfer redundancies Newcrest confirms Telfer redundancies Newcrest confirms Telfer redundancies Newcrest confirms Telfer redundancies

After MiningNews.net* received a tip-off regarding potential job losses at the operation this morning, Newcrest confirmed what will come as no shock to industry commentators and observers who have been keeping a close watch on the company in recent months.

Newcrest said that like all of its sites, Telfer had been reviewing its operating plan with a focus on producing only profitable ounces, lowering costs and enhancing productivity to ensure it was cash flow positive in this environment.

"As a result, over the coming months Telfer will reduce the level of mining activity across the operation, which means an associated reduction in the number of employees and contractors required to support the operation," Newcrest confirmed to MNN.

While communication and consultation with Telfer employees and contractors about the proposed cuts has been underway for some time, MNN understands Newcrest will undertake a staged approach in reducing the workforce.

The company is yet to say how many jobs will be cut and at this stage it is unknown what departments the cuts will come from.

Newcrest said not filling existing vacancies, offering redeployments and other options such as job share arrangements were all being considered to minimise the number of redundancies required.

With the gold price slipping to its lowest levels in decades and the company's shares plummeting to all-time lows, Newcrest admitted it was not immune to major external cost pressures.

"The gold price has fallen significantly and the Australian operating cost environment remains relatively high," the company said.

Newcrest has being reviewing its high-cost operations in the wake of subdued market conditions. In June it flagged $A5-6 billion of impairments, cost-cutting and the removal of high-cost ounces.

The write-down was likely to encompass all goodwill on the balance sheet, comprising $3.6 billion for Lihir and $200 million for Bonikro, and impairments of up to $2.2 billion on its higher costs assets - Telfer, Hidden Valley and Bonikro.

While the company announced plans to slash corporate costs by 20% and close its Brisbane office, news of redundancies at its Australian operations had not surfaced before.

Telfer is considered a higher-cost operation for the company, with the mines C1 cash costs reaching $1162 an ounce in the March quarter. The last spot gold price was $1249.70/oz.

The last spate of job cuts at Telfer occurred back in 2008 when about 400 positions were made redundant.

About 1800 employees and contractors are employed at the mine.

Shares in Newcrest were last trading up 0.8% to $A9.82.

*MNN is a sister publication of PNGIndustryNews.net.

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