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Indaba’s somber start

Delegates to the
Indaba continue their
discussion during
tea break
Cape Town, South Africa — MININGREVIEW.COM — 10 February 2009 – This year’s Mining Indaba in Cape Town got off to a somber start as news of discontinued operations and retrenchments washed over delegates, reports fin24.com.

UK-listed mining company Xstrata announced that it would retrench about 686 employees at its Sunbury-based nickel operations. This follows an announcement in November that Xstrata would accelerate the closure of its Craig and Thayer-Lindsley operations at Sudbury, both of which were mature operations, but which ceased with immediate effect.

Xstrata said the Fraser Mine Complex would be placed on care and maintenance while the Strathcona Mill, with annual capacity of 2.7 million tonnes of ore, would be reduced to two work shifts from four. And Xstrata’s Fraser Morgan development project would be deferred with a view to restarting it when economic conditions allowed.

Within minutes of this announcement Anglo Platinum – the world’s largest platinum producer – revealed that about 8 000 contract workers and 2 000 direct employees on its mines would be reduced, and recruitment to fill non-critical positions would be avoided.

“Every effort will be made to avoid the retrenchment of permanent employees,” said Anglo Platinum CEO Neville Nicolau. “However, should platinum group metal (PGM) prices deteriorate further, this may become unavoidable,” he warned.

Fin24.com added that no less important for its illustration of the extent of recession in the mining industry was the Firestone Diamonds announcement that operations at Bonte Koe had been suspended. This was owing to a review by De Beers of its Namaqualand Mines operations in South Africa, which included a toll treatment joint venture it has with Firestone at its Bonte Koe mine on the Buffels river.

De Beers said that a decrease in revenue received from diamonds recovered, and an increase in mining costs at its Buffels River mine, had resulted in its decision to suspend operations indefinitely. About US$2.5 million (R25 million) has been paid by De Beers to Firestone for the early cancellation of the toll-treatment agreement.