W.M.C. cuts production

Press, 27 August 1977, Page 19

W.M.C. cuts production

|NZPA Melbourne Western Mining Corporat-:-ion, Ltd, Australia’s largestnickel miner, is cutting an-i . nual production by 10 per cent and laying off some 600 y (staff at its' West Australian activities because of the i continuing weakness in the : iworld nickel market. li The company announced: I in Melbourne that the production cut will be effective; i (from September 2 and will 11 (involve the suspension of t work at the Great Boulder mine, the Fisher mine at]) Kambalda and other areas. < As well there will bell sackings a' various process-]!! ■ing plants. \t The production cut would mean a reduction of around, i 35,000 tonnes in concern] t trates output and a cut of f between 4500 and 50001 < tonnes a year in the amount jj of nickel metal in concentrates produced, said theil chairman and managing (t director (Mr A. Parbo). It “The Great Boulder I r and the Fisher mines,] which will account 1 1

for about 80 per cent of the production cut, will be placed on a care and maintenance basis until further notice,” he said. The world nickel market I has weakened in recent months and the world’s largest producer, International (Nickel of Canada (Inco) has (suspended its raarket- : leading, producer price. Inco also rescinded an earlier increase in the producer price which stood at the SUS2.4I a lb. The unofficial producer price set by Inco in private dealings with its customers] is about the official price of SUS2.2O a lb which ruled earlier this year. Price cutting has been reported in the United States,] and the Amax Mining Company has been named as one of the price-cutting companies. The slump in prices has been about 10 per cent and this has resulted in a buildup of stocks held by the maior producers. Mr Parbo said that Western Mining was at present;

n carrying nickel metal stocks , equal to between four and djfive months production. "This level seems, to be the general trend throughout tithe world. tl "Producers and consumers -(have a large amount of 11 stocks which they haven’t s been able to use. -I "The slump in the world (nickel market is closely tied ijto the depressed world steel • (market because of nickel’s ■ ' importance in the production 'of some steels. -] “I can’t see any immediate >! improvement in the market, J but I’m not going to make f! predictions about the longerKterm,” Mr Parbo said. About 50 per cent of the -(staff being sacked will be ,| underground workers at the Great Boulder and Fishery ‘(mines. -( “The others will be sur-i face workers at both mines Land those employed at the I processing plants.” The sackings will be ; spread equally between the (towns of Kalgoorlie and ■ Kambalda. which are about .'56 km apart on the eastern!

s(goldfields of Western Australia. i The smelter and refinery »I activities will not be tiaffected by the production: (cut, except that both plants] s will have about 10 per cent f-less throughput to process,” t!he said. The 600 workers to be; i( fired will be treated in.I accordance with all the rele-p livant award provisions. . - Mr Parbo would not com- , i ment on whether the company, which is due to make ' : a preliminary final state- t ment about September 15, t - was running at a loss, or making low profits because ' of a price fall. ; ( “We are negotiating with ] out customers to try to ar- ' (range a sensible price based ! ion the present unofficial' c world price. “The price terms and ton-| c j • r nages contained in our con-( t : tracts will have to be re-] negotiated following thei dropping of the producer;’ i: price by Inco,” he said. L