Flin Flon mine will close in 2021, eliminating 900 jobs

The economy of northern Manitoba was hit hard this week by Hudbay Minerals Inc.'s closure of its 90-year-old mine in Flin Flon in 2021.

Hudbay told his Flin Flon employees – about 900 of them – that it would not be economically profitable to keep one of its operations open beyond 2021.

Flin Flon, which has just over 5,000 inhabitants, was built around the first mine created in 1927. Since then, more than 25 satellite mines have disappeared, as have their owners. (Hudbay bought the Anglo American operations in 2004).

The Flin Flon area is almost completely dependent on Hudbay's operations for its existence. But the Toronto-based company – which now concentrates most of its resources on a large mine in Peru – has made it clear for some time that its anchor mine to the north, the 777 mine whose The bridgehead is in town, has run out of ore and has reached the end of its life cycle after having expanded its operations a few times.

The novelty is that it has also been decided that the Flin Flon Zinc Plant will also have to be closed by 2021. This will eliminate all of the company's activities in the city.

In addition to Flin Flon's 800 to 900 employees, Hudbay has approximately 400 in Snow Lake, approximately 200 km east of Flin Flon, where it operates Lalor's gold-copper-zinc mine. opened in 2012.

In 2015, the company acquired the dormant New Britannia mine at Snow Lake and is in the process of renovating the gold processing plant, which could create 80 additional jobs.

Company officials were not available for talks on Wednesday.

In a note to Flin Flon staff, Robert Assabgui, vice president of Hudbay's Manitoba division, said, "We recognize that this will have a tremendous impact on our employees and the communities in which we operate …" "Not having all the answers right now, the respectful thing to do is start the planning process for an orderly transition to a smaller mine and mill located in Snow Lake."

Cal Huntley, mayor of Flin Flon, said the company offered many retirement benefits, and one company official said in an email that about 300 of the Manitoban workers in Hudbay were eligible to retire.

"Obviously, it's very annoying for the community," Huntley said. "It was one of the scenarios discussed in recent years, so it was not totally unknown, but it was not the option we were hoping for."

In his message to employees, Assabgui said: "Naturally, everyone will want to know what it means for jobs".

But society does not have the answers to this question. Assabgui said it would require more workers at its Snow Lake site, which includes a zinc processing plant and the operation of the New Britannia mine, which will soon be reactivated. The company is studying the potential of a small deposit located near the Lalor Mine, called the Pen Deposit, but if it is developed, it will be very small.

Hudbay has forecast US $ 19 million for exploration in northern Manitoba over the next few years, but it will take many years between the discovery of a mineral deposit and the development of a mine. in production.

Huntley said most workers in Lalor at Snow Lake are residents of Flin Flon. More Flin Flon residents may be able to work on site, possibly replacing underground contractors that were used because the company was not able to recruit enough full-time workers in the area .

"It certainly will not be the case in three years," Huntley said.

The mining industry in Manitoba has become so hampered that the Mining Association of Manitoba this week cut its executive director position. The provincial workforce has become so small that membership dues – levied at a certain rate per employee – would not be sufficient to cover the Executive Director's salary.

The closing of Flin Flon is the last of the challenges that the economy of northern Manitoba has faced in recent years.

In Thompson, Vale shut down its nickel smelter this summer and serviced its Birchtree mine in the city a year ago. The Pas's stationery almost closed two years ago. The small Hudson Mine, Reed Lake, was closed this summer after five years of operation. The rail service disruption at Churchill, which continued for 18 months until it was re-established this week, created great uncertainty for the north.

It is clear that more than 2,000 high-paying jobs are being eliminated from the northern economy.

Chuck Davidson, CEO of the Manitoba Chambers of Commerce and co-chair of Look North's provincial economic development working group from Snow Lake, said Northerners are incredibly resilient, but they're going through a period very difficult.

"An important part of the Look North strategy was recognizing that we need to start looking for other opportunities," he said. "The mining industry will always make a decisive contribution to the northern economy, but are there ways to diversify?" The challenge in northern Manitoba is to continue to experience setbacks after setbacks . "

Huntley said Flin Flon was working on a plan to diversify his economy.

"It would have been more enjoyable if we were a little further along that path," he said. "But we are three, who knows what can happen during this time."

The provincial government has tinkered with its minerals branch while exploration has been lagging for several years now. At a provincial conference on the mining industry last week, Blaine Pedersen, Minister of Growth, Enterprise and Trade, was optimistic about the sector's fortunes.

On Wednesday, he said, "The Flin Flon community has known for a long time that the life cycle of the 777 mine is limited, and in the meantime the Lalor mine is intensifying. is in no way the end of Flin Flon's life. "

But Tom Lindsey, NDP MP for Flin Flon, said the Pallister government had not done enough to reinforce the weakness of the northern economy.

"Part of the answer is that the government needs to do things to at least satisfy some of the concerns of the mining sector to find out where they are," Lindsey said. "But what did the government do to try to encourage Hudbay to maintain his Flin Flon operations? As far as I know, nothing at all."

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Martin Cash
Journalist

Martin Cash has written a column and news about the business world at the Free Press since 1989. Over the years, he has written several business cycles and has experienced ups and downs (and an increase) in the fortunes of many local businesses. .

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