TORONTO (miningweekly.com) – Xstrata Nickel will cease operations ahead of schedule at the Craig and Thayer-Lindsley mines, in Sudbury, in response to low nickel prices, the company announced on Thursday.
Both operations are nearing the end of their productive lives, the group said.
The early closures will enable the group to lower its production costs in Sudbury, where it is also building two new, lower cost operations, the Nickel Rim South and Fraser Morgan mines.
The Thayer-Lindsley mine, which produces 2 700 t/y of nickel, will cease operations by the end of January, and the 5 500 t/y Craig mine will be placed in care-and-maintenance mode in June 2009.
“In the current environment, these older, higher cost operations are no longer viable,” said Xstrata Nickel CE Ian Pearce.
“The accelerated transition from older mines to lower cost operations will contribute to the sustainability of our business at Sudbury over the long-term.”
Although the permanent employees at both Craig and Thayer-Lindsley will be transferred to other Xstrata operations in Sudbury, the group said that it plans to use the restructuring to reduce its permanent workforce in the region by about 250, through a voluntary early retirement program.
Xstrata acquired the operations when it bought Canadian miner Falconbridge in 2006.
Thr group's announcement follows several moves by other miners including Companhia Vale do Rio Doce, First Nickel, FNX Mining and Hudbay Minerals to curtail production or delay projects in response to slumping nickel prices.
(For a list of companies that have announced cutbacks as a result of the financial crisis and commodity-price declines click here.)
PROJECTS ON SCHEDULE
Meanwhile, Xstrata said that the Nickel Rim South project, which will be its flagship mine in the Sudbury basin, is ramping up on schedule and in budget.
The mine will begin production in 2009, and ramp up to an output rate of 18 000 t/y of contained nickel by early 2010.
The Fraser Morgan mine will also continue to ramp up to commission on schedule in late 2009. At full production, Fraser Morgan will produce 7 200 t/y of refined nickel.
