8 Jan 2014

Otago gold mine to lay off workers

6:50 pm on 8 January 2014

New Zealand's largest gold mine is expected to lay off about 100 workers over the next two years.

OceanaGold, which owns the Macraes goldfield in Otago, says because of the prolonged drop in gold prices it has to reduce its costs in order to sustain operations.

Macraes gold mine in 2010.

Macraes gold mine in 2010. Photo: PHOTO NZ

Managing director Mick Wilkes said the goldfield has operated continuously for more than 23 years and has been a major employer and contributor to the Otago region and economy.

He said at current prices, the Macraes open pit has a mine life of four more years, while the company's Fraser underground mine will continue operating until mid-2015.

There are 560 fulltime employees and contractors working at the site at present.

Mr Wilkes said jobs of operational and support staff would be reduced. A company spokesperson said the mine plan would affect about a quarter of the current workforce.

Otago Chamber of Commerce chief executive John Christie said he understands about 100 people will lose their jobs and that will definitely affect the local economy.

Mr Christie said it is devastating news for the community, but is a decision the company needs to make for its own long-term viability.

Dunedin mayor Dave Cull said the decision is not a surprise, as OceanaGold had been signalling that this may happen, but it is still very tough on those involved.

Mr Cull said small towns near the mine, including Middlemarch and Palmerston, will be hard-hit, as many people from there are likely to work at the mine.

"The effect will be considerable. So I think that as a community, Dunedin will be looking to see if there's anything we can do to ameliorate those losses."

The job cuts underline that Dunedin needs to increase its focus on building up its knowledge-based industries, he said.

Timetable to be set

The Amalgamated Workers' Union says a timetable will be worked out over the next two weeks for letting the workers go.

Secretary Calvin Fisher said on Wednesday that he understands that 106 people employed directly by the mine will lose their jobs.

"They don't yet know who they are because there's a selection process to go through. The timetable for that's set to be concluded by the 20th of January.

"We'll be working with the company this week and next week to try and ensure that the process is robust and fair and a situation can be determined by that date."

Mr Fisher said the number of sub-contractors who lose their jobs will depend on how their companies chose to handle the reduction in work.