Company reasoning is sound, says former natural resources minister
A piece of antimony ore from the Beaver Brook antimony mine in central Newfoundland is displayed at a conference. Hunan Nonferrous Corp. has shut down the mine because it says the grade of ore being produced is not high enough, and the site costs too much to operate. — Telegram file photo
Former owners of the Beaver Brook antimony mine in central Newfoundland are crying foul over the mine’s idling. They want the provincial government to provide former employees and the public with more information on why it happened.
The last of about 90 layoffs at the mine, first announced in late November, came into effect this week. Only about 10 workers have been kept on for maintenance and potential exploration work.
The mine is owned by Hunan Nonferrous Corp., a Chinese company that said the site is producing a lower quality ore than expected and costs are too high.
However, the mine operation is paid up on taxes and royalties to the provincial government; there was no missed payroll and those with a financial interest in the mine — including directors with the mine’s former owner Canadian Antimony Mine Inc. (CAMI) — have been told to expect their profit share for 2012.
When Hunan Nonferrous bought the operation from CAMI in 2009, for $29.5 million, it was estimated the mine had a life of eight to 10 years.
“The prices for the metal have never been this high,” said a director with CAMI, Grant Stonehouse, in a recent interview with The Telegram.
He said the company has not been forthcoming with responses to questions on the business rationale for shutting down the operation.
“(CAMI) are not a shareholder in (Hunan Nonferrous), but we are a holder of an exclusive contract — a contract to participation in the financial results of the mine, the revenues generated,” he said.
There has been a suggestion the shutdown will get Hunan Nonferrous out of that contract.
“We’re economically motivated to keep (the mine) open ... but at the same time we were the ones who re-started it. We invested, we raised money, we had to take dilutions because costs were higher than our original business plan.
“And then we raised more money ... we were forced to sell (the mine) because there were those who didn’t want to put in more money and that was for reasons of their own problems — not having anything to do with the mine,” Stonehouse said, claiming his interest is in seeing the mine continue on.
Stonehouse said he brought his questions about the mine shut down to government, asking the premier to look into it.
“They didn’t seem very interested,” he said.
In a letter provided to The Telegram, dated Dec. 21, 2012, then-Minister of Natural Resources Jerome Kennedy wrote to the CAMI director, saying staff from the department had met with mine management and representatives from Hunan Nonferrous.
“My staff is satisfied with the reasons provided by the company as to why operations were suspended,” he stated.
Kennedy notes the company is planning exploration work in the area during the next two years.
Meanwhile, the mayors of Glenwood and Appleton, the towns closest to the mine, say about 50 of the mine layoffs affect families in their communities.
As of the 2011 census, the population of Glenwood, about 40 kilometres southwest of the mine, stood at about 800 and Appleton at just under 625.
“We’re obviously concerned because we’re going to have a lot of displaced workers,” said Glenwood mayor Darren Bursey.
He has heard from one group of eight workers who were typically on shift at the mine together. Of the eight, five have already found jobs elsewhere — some in Labrador and some outside of the province.
It affects the local economy, but also things like the population at Lakewood Academy school and the potential for shifting of public services to larger centres.
Mayors want more info
Bursey said it was a man from Maine, Joe Martin, who identified himself as an investor in the mine, who made him aware of the issues around the shutdown last week.
“I don’t know if this is accurate. I don’t know who has got what axe to grind, but I hope the government does do some investigation,” he said.
The mayor has put some questions of his own to government. He said the town ais awaiting a response.
Across the way in Appleton, Mayor Derm Flynn was informed in the same way.
“I don’t have any specific information that confirms that (story of wrongful closure) one way or the other,” he told The Telegram this week.
However, he said he felt the story casts doubt on the purpose of the closure and wants to hear more.
“There hasn’t been a lot of direct or public comment from the government which is somewhat surprising, given that there’s a hundred or so jobs at stake and a fairly large economic impact on the Central region,” he said.
“Now, that’s not to say there’s not things happening ... but we haven’t been a part of it.”
The Telegram contacted the Department of Natural Resources about the Beaver Brook mine Wednesday. With a cabinet shuffle involving the minister the same day, there could be no response before deadline. The paper is hoping to have some response on the issue in the coming days.
The Beaver Brook antimony mine employed about 100 people at its peak operations in the late 1990s. It was closed in 1998 but re-opened in 2008.
Antimony is used in the manufacturing of batteries and flame retardants.