Smelter becoming a single-furnace operation in 2017

Source: Thompson Citizen

Written by: Ian Graham 

Vale’s Manitoba Operations could have fewer workers next years as it changes its smelter to a single-furnace operation but the company hopes that the transition will affect fewer than 35 employees due to reduced hiring this year as well as retirements and resignations.

The reduction is a result of less external feed from the Voisey’s Bay, Newfoundland plant being available as the Long Harbour processing plant ramps up operations, the company says.

“We have planned for some time to become a single-furnace operation,” said Manitoba Operations corporate affairs and organizational development manager Ryan Land. “Initially, we planned to reduce to one furnace in April 2015. The extension of the second furnace from 2015 to 2017 is the result of more feed being available from Labrador than was originally expected. We will continue to process our own Manitoba-source nickel at roughly the same rate through to 2018, until the concentrate loadout facility is complete and commissioned.”

United Steelworkers Local 6166 president Les Ellsworth said in the September issue of the Steel Gauntlet union newsletter that the current contract with the company doesn’t include provisions to address the fallout from going to a single-furnace operation.

“We do not agree with a single-furnace operation because it puts the whole operation in jeopardy if the furnace goes down and there is no backup,” Ellsworth wrote in his president’s report. “We know that there will be fewer people needed to run the smelter and possibly some effect on the refinery. The company has stated that they will do everything they can to avoid a layoff. It is expected that the numbers will come from areas such as: under budget for hourly employees, possible members retiring, and moved to other areas of the plant. Our position is that we need to look at every contractor and have our members trained to take over their work before there are any layoffs in our membership.”

Land said shutting down one furnace would reduce the overall workforce plan of 1,500 for Manitoba Operations by about 70 positions but noted that the current number of actual workers was less than 1,450 and after the second furnace is shut down, the projected number of employees would be 1,428. He also said that maintaining a two-furnace smelter is no longer viable for a number of reasons.

“Since smelting and refining costs are largely fixed, our unit costs will go up slightly as a result of the reduction in volume,” he said. However, there is no opportunity to increase our throughput. Number one furnace would be due for a major rebuild in 2017 but there is no feed available to fill it if it were rebuilt and, most importantly, we must reduce our sulfur dioxide emissions to meet the performance agreement in place with Environment Canada to cover the 2016-18 timeframe during which the concentrate loadout facility is being constructed, which means lowering our smelter throughput.”

Ellsworth’s president’s report also made mention of recent safety violations in one the Manitoba Operations mines.

“A proper joint investigation took place and it was revealed there was a cause for concern,” he wrote. “Let me be perfectly clear, we will not walk away or hide when it comes to ensuring our members’ safety at work.”

Land said the company was also committed to ensuring worker safety.

“The fact that we continue to have significant incidents and near misses occur is a stern reminder that our journey to zero harm continues,” he said. “We encourage the reporting of all incidents and near misses, we jointly investigate significant incidents and take the necessary actions to manage risk to as low as reasonably achievable. The incident Mr. Ellsworth may be referring to is no exception. We continue to work with USW 6166 to ensure that our employees return home safely, every day.”

The union president is also concerned about the effects of the smelter and refinery shutdown by the end of 2018.

“It is our members who, over the years, have worked to reduce cost and produce a good product that has kept us in business for over 60 years,” said Ellsworth. “In order for us to be successful, we need all stakeholders pulling in the same direction. Talk is cheap, let us put concrete action plans in place before devastation occurs like in other communities in Northern Manitoba.”

The company anticipates a workforce of around 900 full-time equivalent employees by the end of 2018, which represents a reduction of the 525 employees directly employed in the smelter and refinery and related operational support and service areas.

“We will continue to transition employees into mining and milling from the surface plants in order to offset some of the impact and we are working with all levels of government on an impact mitigation plan,” said Land. “We also have a significant number of employees who will be eligible for retirement by 2019 and this is expected to further offset the impact of the smelter and refinery closure.”

Land also said that, as a result of recent company restructuring, in-mine and near-mine exploration activities will now report directly to Manitoba Operations but unlike in Sudbury and St. John’s, there were no layoffs associated with the change.