More than 200 jobs are expected to be cut at the Paroo Station mine in Western Australia following steep falls in the price of lead.
Ivernia, the Canadian owner of the open-cut lead carbonate mine and concentrating facility near Wiluna, has shut operations until further notice.
The London Metals Exchange (LME) lead price has fallen 23 per cent since July last year to around $US1766 per tonne.
Ivernia chief executive Wayne Richardson said the current lead price had dropped well below sustainable levels and could not support the company’s profitable ongoing operations in the mid west of WA.
“In order to protect shareholder value and conserve the viable deposits of our ore body, the decision has been made to place the mine on care and maintenance until further notice,” Mr Richardson said.
He added that operations would return to full production once prices improved.
The decision comes in spite of the company achieving record production and sales in 2014 and as it undertakes a cost reduction and efficiency improvement program at the mine.
The management of Paroo Station Mine, which has 145 employees and 80 contractors, is speaking with employees, customers, lenders, mining contractor MACA and suppliers in relation to changes in operations.
A skeleton staff is expected to remain on care maintenance.
The company has also commissioned an independent technical report to help it assess under which lead price it could resume operations.
But it will not provide guidance on its expected remaining production and sales prior to completing the mine shutdown.
Ivernia, which is listed on the Toronto Stock Exchange, operates under a management services arrangement with Enirgi Group Corporation, Ivernia’s majority shareholder.