Hudbay’s latest quarterly figures provide fresh insight into how the partial strike in Flin Flon and Snow Lake may – and may not – be impacting production.
The company reported that in Q2 2015, northern Manitoba production increased three per cent over the same period last year. That’s despite the fact that IAM Local 1848 was on strike for two of the three months that made up the latest quarter.
Hudbay reiterated its plan to meet this year’s production guidance, which is a prediction for output set at the start of the year. To accomplish that, zinc and copper production must increase modestly, while precious metals production can actually decline a little.
Since the IAM strike began on May 2, sources within the Hudbay workforce have said production at Flin Flon’s 777 mine has notably declined from typical levels.
In reporting its Q2 data, Hudbay confirmed a 777 drop but also reported higher production at the Lalor mine near Snow Lake.
That statement matches what a source in contact with an ore truck driver for Hudbay recently told The Reminder: that Lalor (and Reed mine) production is ramping up to compensate for strike-related drops at 777.
While overall Flin Flon-Snow Lake output is up slightly, IAM pointed out that since neither Lalor nor Reed were at full production for all of Q2 2014, Hudbay’s production increase would be more significant if things were running at capacity.
That’s a fair assessment, though we simply do not know how much more output will transpire once the strike is over.
Would increased output in Manitoba have lessened, at least to an extent, the $55.2-million loss Hudbay sustained in Q2?
It most certainly would have. But a Q2 loss of some description appeared inevitable given impairment charges and increased pension costs cited by the company, not to mention copper and zinc prices that have generally slid downward since the two-week point of the strike.
And let’s not forget that even when Flin Flon-Snow Lake operations were at full capacity in Q1 2015, Hudbay still recorded a $23.7-million loss.
For Q2, we do not know how much production was down at 777 and how much it was up at Lalor (and possibly Reed). That’s because Hudbay no longer breaks down production on a mine-by-mine basis in Manitoba.
“We are now reporting production at the business unit level,” Scott Brubacher, director of corporate communications for the company, said last week. “This change was made starting with our Q1 2015 results, given the growth of Hudbay’s business.”
Growth or not, in order to achieve its production guidance in Manitoba, Hudbay can’t very well go without people to perform the duties normally taken on by IAM. And that’s where one of the big controversies of this strike comes into play.
Sources inside company operations have told The Reminder that non-unionized shift bosses have been working extra hard to keep things running in the absence of IAM.
How long can a relative few fill in for many? Will exhaustion kick in? In May, not quite three weeks into the strike, one source, a miner at 777, said the shift bosses were “chasing the end of a list that keeps piling up.”
Further into the strike, IAM asserted that equipment suppliers under contract to Hudbay had begun providing replacement workers – “scabs” in less neutral lingo – who were working beyond their usual scope in order to compensate for the union’s strike.
IAM contended these replacement workers are illegal in this context and made the issue part of a formal complaint filed with the federal labour board.
Hudbay has said it has done nothing wrong and the companies IAM accuses of providing replacement workers have not publicly commented on the matter.
There is no law banning replacement workers – and not everyone agrees that’s what the Hudbay contractors are – in federally regulated industries such as mining.
But IAM vice-president Blair Sapergia has said the Canada Labour Code is “fairly clear that you cannot bring in replacement workers if your sole intent is to break the union” – and that’s IAM’s argument.
More than three months in, the strike has been difficult on both IAM and Hudbay, with each side defending its position as
warranted and reasonable.
What remains most desirable is a prompt resolution to the strike – with both sides able to put this unfortunate period of labour discord behind them.
