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Home > Sectors > Mining > Xstrata > Xstrata Nickel employees optimization plan for Sudbury Operation

Xstrata Nickel employees optimization plan for Sudbury Operation

Posted: November 13, 2008
By: Marc Boissonneault, Vice President, Xstrata Nickel, Sudbury Operations

As you know, these are difficult and unprecedented times. The combination of a rapid decline in metal prices, volatility in commodity markets, the global economic outlook, and increasing operating costs at our older mines in particular, requires action.

Given these challenges, the Sudbury management team is responding. We have completed a reassessment of all aspects of our business. This process has been conducted in order to ensure that we are well-positioned for sustainable, long-term growth for value.

Now, more than ever, we must diligently continue to ensure that we are making disciplined and prioritized operational decisions that are aligned with our strategy of being financially robust through the cycle.

In order to better prepare ourselves for the future, while also dealing with the current unprecedented economic challenges, I am announcing the following:

  • Accelerated transitioning and redeployment of employees to our Sudbury growth projects: Fraser Morgan and Nickel Rim South.
  • Ceasing operations at Thayer Lindsley Mine at the end of January 2009 and the further acceleration of transitioning Craig Mine by several months to care and maintenance mode. This will occur in June 2009 rather than the last quarter of 2009, as previously planned.
  • Continuation of the pre-feasibility study at Onaping Depth, with infrastructure at Craig Mine being maintained to support the Onaping Depth project should it proceed.
  • A focused and deliberate delivery of capital to improve the Smelter’s environmental performance.
  • Continued capital investment in the Mill aligned with our need to process Ni Rim South feeds. Meanwhile, we will defer the crusher and C-Mill expansions at this time.
  • Due to these operational changes, we will have approximately 250 fewer positions in our organization. To address this in a positive and constructive manner, we will be initiating a one-time voluntary early retirement program, providing retirementeligible employees the opportunity to accept early retirement from Sudbury Operations. Details of this program are forthcoming, and will be provided to retirement eligible employees the weeks of November 17 and 24.

In addition, our business performance has been impacted to the extent that the Sudbury Operations is unable to extend a nickel bonus to its hourly employees for the third quarter. I appreciate this may come as difficult news for many of you, however the current economic environment has placed us in this new reality.

I wish to emphasize to each of you that we will continue to operate within our Vision and Values framework during this transition. Primarily, each one of us must diligently ensure that our first and foremost value – Health and Safety Above All – is the top priority at all times.

Additionally, we will continue to be committed to open and transparent communication with key stakeholders: our employees, our unions, our community, contractors and suppliers.

With this in mind, I urge you to bring any questions or concerns to your managers.

As part of our transitional process in Sudbury, I wish to also announce the following management team changes:

  • Keith Bullock is appointed Manager of Montcalm Mine, replacing John McDonald who has elected to retire from our organization. I would like to extend my sincere thanks to John for his many valuable years of contribution to our organization and I wish him all the best in his retirement.
  • Shayne Wisniewski is appointed Manager of Fraser Mine. In this role Shayne will assume overall responsibility for the Fraser Mine complex. Pat Fantin will continue to lead the Fraser Morgan Project team. Pat and Shayne will work in close collaboration on the strategic transition and timely execution of the Fraser Morgan project, which is vital to our future in Sudbury.
  • Peter Xavier is appointed Manager of the Mill and Central Services, assuming overall responsibility for these operations.
  • Kevin McAuley will continue to lead the Strathcona Mill Expansion Project.
  • Brad Bastien, TL Mine Operations General Foreman, will assume the accountability of managing the orderly closure of the TL site. Brad will report to Dan Malinski, Manager of Craig Mine and Onaping Depth Pre-feasibility Project, during this interim period.

Shayne, Keith, Peter, Pat and Kevin will report to me.

I wish to emphasize to each of you that we must maintain our constant focus on competitiveness, productivity, cost-efficiency and the longer term strength of our organization. That said, the most important objective will continue to be the relentless pursuit of achieving Zero Harm. Health and Safety remain the first priority for Sudbury Operations at all times and particularly as we enter this transitional period.

Rest assured that the disciplined operational decisions that we have announced today are being made to enable the creation of long-term, value-generating growth and to create a solid competitive position for our operation. We have a vibrant and exciting future in Sudbury, coupled with the benefit of talented and skilled employees. This is of great value to us. It is also important to acknowledge the long contributions of both Craig mine and Thayer Lindsley mine, which have generated value for our company for many years. This was made possible by the skills and commitment of employees at those operations, and we will look forward to applying these same skills and commitment to our new, low-cost mines.

Xstrata has a strong commitment to continue to invest in high value projects like Nickel Rim South and Fraser Morgan. Significant investments of capital funds are required to bring these projects to full production, providing a basis for a sustainable future for our organization.

We will continue to provide you with updated and timely information going forward. We commit to providing a weekly update to employees for the coming weeks as we conduct the transitions announced today. In the interim, I again remind each of you to ensure that you stay focused on working safely at all times.

Thank you.

Sincerely,

Marc Boissonneault
Vice President,
Xstrata Nickel,
Sudbury Operations

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