February 9, 2009

Xstrata cutting 686 jobs

Canada's mining industry took a hit Monday with the announcement from Xstrata PLC that it is cutting 686 jobs at its nickel operations at Sudbury, Ontario.

Xstrata, based in Zug, Switzerland, began a three-day shutdown to facilitate the restructuring at the Ontario complex, the Canadian Broadcasting Corp. reported.

The company said its Craig and Thayer-Lindsley mines would close operations immediately and its Strathcona Mill would be cut back to two work shifts from four.

The decision also means Xstrata's Fraser Morgan development project is on hold indefinitely until world market prices improve.

However, the ramp-up of production at the company's Nickel Rim South project in Sudbury is still on track to produce about 7,400 tons of nickel this year, Xstrata Chief Executive Ian Pearce said.

Our leadership team is taking proactive and decisive measures during challenging times, Pearce said. The continued decline of the economic environment and deteriorating commodity markets, coupled with high operating costs particularly at our older mines, are negatively impacting our Sudbury operations.