Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canadian Kinross Gold Corporation (TSE:K)(NYSE: KGC) plans to suspend operations at its La Coipa gold and silver mine in northern Chile in the second half of 2013, and has announced a “partial suspension,” to its workforce reports local newspaper El Nortero (in Spanish).
According to unionized employees at Compañía Minera Mantos de Oro, Kinross’s subsidiary in Chile, the firm had announced the closure would happen later this year, but last week’s meeting surprised quite a few. Now workers are calling for a general assembly to be held Tuesday and Wednesday this week, where they’ll decide what to do about Kinross notification.
However, the mining company’s communications officer, Steve Mitchell, told MINING.com this is not the first time the union has heard of the company’s plans. And that, in fact, Kinross announced this decision when releasing its Q4 results in 2012.
“Several months ago, in late 2012, the former general manager at La Coipa met with the union to tell them about the company’s plan. This latest meeting was re-iterating information which had already been conveyed,” he said in an e-mail.
Agustin Latorre, spokesperson for the Mining Federation of Chile, a group representing major mining unions in the country, says the temporary closure will leave over 1,000 workers unemployed.
Miners interviewed by El Nortero said Kinross’s subsidiary did not invest enough in La Coipa, nor did it plan the current phase with the workers’ interests in mind.
The company, however, has said it continues to assess the remaining mineral reserves and resources and exploration potential at the open-pit mine, including the potential of an expansion — known as La Coipa Phase 7 (Pompeya) — which could start operation in about a year, based on the current mine plan.
Kinross Gold, fifth in world gold production rankings, produced 2.62 Moz of gold equivalent in 2012. This volume exceeded Kinross’ guidance of 2.5-2.6 Moz of gold equivalent and is 3% higher than 2011 production totals (2.54 Moz of gold equivalent).
Image of La Coipa mine, courtesy of Kinross Gold
