Vale Canada Limited announced today that it will suspend operations at its Birchtree Mine in Thompson, Manitoba, more than 50 years after it first opened in 1966. The mine will be placed on care and maintenance by October 1st, 2017.
“Birchtree Mine and the men and women who work there have been an important part of the Manitoba Operations for much of our 60-year history,” said Mark Scott, Vice President, Manitoba Operations. “The mine has been especially challenged over the past several quarters as it nears the end of its life of mine plan, and in light of the prolonged downturn in the nickel price cycle.”
Since opening in 1966, Birchtree Mine has produced nearly 23 million tonnes of ore and has been a leader in managing risk to as low as reasonably achievable through Vale Manitoba Operations’ SafeProduction risk management system. Since SafeProduction was launched in 2003, Birchtree Mine has earned six John T. Ryan Awards for lowest injury frequency, including four regional and two national awards.
The future of Birchtree Mine has been under review for some time. In 2012, facing an imminent suspension of operations at the mine, Manitoba Operations employees launched and led the $100 Million Challenge, whose success exceeded the cash flow improvement target set and afforded Birchtree more than four additional years of safe operation, despite falling nickel prices over that period.
Factors contributing to the decision at this time include low metal prices and ongoing market challenges, declining ore grades, and, more recently, challenges with mine infrastructure and production delivery. Birchtree Mine was previously on standby from 1978-1988, reopening in 1989. In the year 2000, a major capital project deepened the mine shaft and installed infrastructure required to increase the mine’s production. The projected life of mine date at that time was 2016.
The suspension of operations at Birchtree will result in an annual reduction of approximately six kilotonnes of nickel production from Manitoba Operations. Opportunities are being explored to offset a portion of that loss with increased production from Thompson Mine.
There will be a workforce reduction that will result in layoffs. There are approximately 150 employees directly employed at the mine, and it is expected that up to 50 additional roles in downstream processing, service and support functions will also be affected. Vale indicated that it will do all that it can to mitigate the number of people adversely affected.
The adjustment process will soon be established and a transition team will be formed to design and guide the process for Birchtree Mine in a safe, orderly and respectful fashion, and in accordance with the requirements of the existing collective bargaining agreement. Vale intends to continue to work closely with all levels of government and the local union representing hourly paid production and maintenance workers at the mine, USW 6166, throughout this process.
“We remain committed to a long-term mining and milling future in Thompson,” said Scott. “We are currently investing more than $80 million in our concentrate load-out facility, which is critical to our future as a mining and milling operation, while also completing a $40 million upgrade of our tailings management area to accommodate our life of mine plan production. While this announcement will present another challenge for our employees, our community and northern Manitoba, we are resilient, our people are strong, and it is through the distinctive SafeProduction action of active, genuine care for one another that we will persevere.”