😰Sudbury Cobalt Production Threatened😰 Vale looking at layoffs in Sudbury
Vale Ltd. employees in Sudbury are bracing for possible layoffs after viewing a company video in recent days they say warned that the Brazil-based mining giant could soon be making cuts.
"It seemed like a threat," said one source, who requested anonymity. "It's coming right from Brazil."
Another source, also a Vale employee, told The Star he had also seen a company video in recent days that warned of possible reductions. He said he came away with the impression there would be "significant" job losses.
The sources say they have been given no details of how many jobs will be cut or when, or if layoffs would be permanent or temporary, but that they could affect members of both Local 6500 and Local 2020 of the Steelworkers. Local 6500 represents production workers, while Local 2020 represents office, clerical and technical staff in Sudbury.
The Star has been told Local 6500 held a membership meeting two weeks ago to talk about possible layoffs. Efforts to reach union executives for comment have so far been unsuccessful.
When contacted by The Star, Vale officials said at that time no decisions had been made.
"We have been very open with our employees about the challenges our business is facing," Danica Pagnutti, a corporate affairs specialist for Vale Canada Ltd., said in an emailed statement on Friday. "However, no final decisions have been made and we have not made any announcements regarding reductions to our workforce."
Vale operates five mines in Sudbury, as well as a mill, a smelter, a refinery and employs nearly 4,000 workers. It mines nickel, copper, cobalt, platinum group metals, gold and silver.
However, nickel prices have remained low this year, at times dropping below US$4 per pound, although they have rebounded in recent weeks and is moving closer to the $5 mark.
Last month, Vale said it would seek out fresh copper mining options and stop expanding nickel production capacity after second-quarter net income plunged on forex losses, rising costs and weaker iron ore prices.
Net income tumbled 99 per cent to $16 million from $1.1 billion a year earlier, far below an average estimate of $421 million.
The world's largest iron ore miner kept making slow progress on cutting net debt, which slipped 3 per cent in the three months through June to $22.12 billion - still a far cry from a target of $15 billion to $17 billion by year end.
Fabio Schvartsman, who took over as CEO in May, said the company was aiming for $15 billion in net debt in 2018, adding that a company reliant on volatile commodity prices should ideally not be carrying debt at all.
"I personally don't have $15 billion as a target for the company's debt. Vale's debt has to be as low as possible. Certainly below 15 is our goal," he said on a conference call in July.
Schvartsman also said Vale would cease to invest fresh funds in its Caledonia nickel mine, in a bid to reduce costs.
In May, Vale ceased production at its historic Stobie Mine in Sudbury due to a variety of factors, including lower grades and volumes of nickel, declining world nickel prices and the fact that miners can't work below the 3,000-foot level due to seismic activity.
Stobie's workforce of 230 employees was to be reassigned to other area Vale plants, while an early retirement incentive package was offered to senior employees in the group.
Also in May, Vale announced its Birchtree Mine in Manitoba will shift to "care and maintenance" and no longer produce nickel starting Oct. 1, resulting in 150 unionized employees and staff being laid off and another 50 jobs also being affected.
Depending on how deep the cuts go at Vale, they are sure to weaken Sudbury's economy, which has struggled to create jobs. In fact, the city has lost thousand jobs in the last two years. In mid-2015, for example, Statistics Canada reported Sudbury had 84,700 jobs, compared to 81,300 in July 2017.
https://www.thesudburystar.com/2017/08/12/vale-looking-at-layoffs-in-sudbury