Newcrest Mining Cuts Jobs at Telfer, More Mines to Have Same Fate

Newcrest Mining Ltd is cutting jobs at its Telfer mine in Western Australia as proof of concrete action on its controversial restructuring plans announced last June 7.

Many jobs were lost at supposedly one of the best and largest gold mines in Australia. Telfer failed to hit production targets since coming into operation and the mine proved to be costly to operate.

Newcrest Mining spokesperson Jason Mills confirmed the job cuts but could not give the exact number of workers who would be losing their jobs. Mills said some workers might be redeployed to other mining sites run by the company.

Telfer is currently evaluating its operating plant. The Telfer mine plans to shift its focus to producing only profitable ounces of gold, reduce costs and boost productivity to have positive cash flow despite the current state of Australia's mining industry.

Mills said that in the months to come, Telfer will reduce mining activity across the whole operation. This means lowering the number of contractors and employees required to run the operation.

The job cuts were announced last June 7 as Newcrest Mining plans to reduce the production of high cost gold ounces as part of restructuring. The upcoming changes do not only apply to Telfer but to other mines as well.

The Telfer mine is already under scrutiny since April 2013 when Newcrest Mining reported gold production at US$1573 per ounce during the first quarter of 2013.

Since the middle of April, gold price is just below US$1500 an ounce and dropped to US$1300 in June of this year. The gold price jumped to more than US$40 overnight to maintain a price of US$1300.

Share price of Newcrest mining dropped to almost 15 per cent before the restructuring announcement last June 7.

Some jobs were already redeployed to the company's Lihir mine, now Newcrest's Melbourne office. Other mines are more than likely to see job cuts under the restructuring plan.