The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
Anglo American, the parent company of HBMS, wants to ensure the Flin Flon mining operation doesn't show red ink in 2004, prompting a major overhaul at the community's largest employer. The restructuring will see about 90 people lose their jobs by next year and some drastic changes in the way the Company does business. "We haven't got the final numbers, but so far about 90 people have been notified of job termination," said HBMS Vice-President of Human Resources Bob Cooper. "The majority of that has been voluntary, but some of them have been involuntary as well." Cooper, the candid guest speaker at yesterday's Chamber of Commerce meeting at the Friendship Centre, said between one-third and half of the laid-off workers will be retirements. Although he remained upbeat during his speech to the 20 Chamber members on hand, Cooper said he couldn't foresee the creation of new jobs to replace those that have been lost. "The only thing that would cause additional jobs now would be if we were to have an additional mine, and that certainly isn't on the horizon," he said. "Given the current operating structure we have, we don't see that increasing." Cooper declined to talk about potential future cutbacks, saying that matter would need to be discussed with the unions first. "We took a look at how we do work and how we employ people to do work," he said. "We're looking at doing work with less people, sometimes less work with less people, sometimes in cases we're looking at doing more work with more people." While the layoffs will continue to be the most talked-about aspect of the Company's overhaul, several other cost-saving measures have and will be implemented. The individual mines within the HBMS operation will now access services such as engineering and geology from a "shared service." In the past, each mine tended to have its own departments for such services. "We can't afford that today," said Cooper. "So if there is a service to be provided, it's provided from a central group. We'll have one group in the organization to provide service to all the mines." There is also a new senior management structure in place that includes the merger of the Human Resources and Corporate Affairs department with the departments that deal with health, safety, environment and quality. The Company will also try to increase the ore grade at its mines but Cooper admitted the financial impact from this would be marginal. "All the high-grade ore bodies aren't where we want them to be, they're where they are and so there is a logical way you can mine," he said. "So you can increase the grade a little from the existing mines, but not a whole lot. It can't save the Company." See 'Greatest' P.# Con't from P.# Other steps include giving more consideration to leasing equipment rather than buying it, and the decision not to rebuild the Smelter next year, which Cooper said would have cost several million dollars. The HBMS representative promised that none of the budget cuts would compromise the areas of safety, health or the environment. Cooper said Anglo American, based in the United Kingdom, has covered losses at HBMS in recent years and is not willing to do so in 2004. The parent company has provided HBMS with a cash infusion of approximately $400 million over the past four years for the 777 mine and related projects. "Our mandate next year is to be cash-positive," he told the Chamber members. "That's not an unusual concept for you guys, but basically Anglo has said, 'We've supported and we've put money into you for the last number of years, and next year we will not give you any money at all to run the operation. You will be on your own.'" Cooper stated that Anglo American has been "aggressive" in recent years in backing away from non-profitable operations. "Where places don't perform well financially, then they make decisions to divest themselves of that property," he said, mentioning mines in Zambia and Australia that the parent company has forsaken. For the future of mining in Flin Flon, Cooper made it clear that HBMS must succeed in being cash positive Ñ by no matter how small a margin Ñ next year. Anglo American is reluctant to invest exploration money in the community, he said, because the best returns come from finding ore where a profitable mine exists. "So therefore it's important that we start making money, returning cash, so Anglo knows we're a good place to invest money, a good place to explore, a good place to create a future," said Cooper, adding that he sees exploration as the future of any mining operation. A handful of factors have had a negative impact on the HBMS's money-making potential, not the least of which are low metal prices. "We're going through, and still in, I guess, a period of very low metal prices for both copper and zinc," said Cooper. "Normally, they're very cyclical; they will go up and down, but normally they tend to go up quicker... and we've been in this position for the last four years." Meanwhile, new mines, which tend to be larger than the one in Flin Flon, have taken a sizable bite out of the metals market. To illustrate this point, Cooper spoke of a newly-established South African mine that produces 35 per cent more zinc each year than HBMS. The strains on the Company coupled with its mandate to turn a profit next year has put HBMS at a crossroads, in Cooper's view. "From my perspective, we're at a point in our history of greatest potential and greatest risk." he said. Cooper commented that he prefers to focus on the potential rather than the risks, mentioning that HBMS "has been on the edge a number of times and hasn't fallen off because people didn't allow it to fall off." In his concluding remarks, Cooper gave his overall assessment of the challenges facing the Company with two points: "It is doable and it's worth doing."
