MORE nickel miners and contractors face a bleak Christmas with the Silver Swan and Waterloo nickel mines near Kalgoorlie and Leinster to shut by year's end.
Norilsk Nickel Australia told workers at both mines on Monday that the underground operations were being wound down immediately.
A spokesman for Norilsk said a total of about 100 employees and contractors would lose their jobs at the two mines.
Five weeks ago the company began shutting its Cawse open cut laterite nickel mining operation 55 kilometres north-west of Kalgoorlie. Up to 230 employees and contractors are affected as that operation enters care and maintenance.
The spokesman said Silver Swan and Waterloo workers would be laid off in stages throughout the next month as those mines were “prepared for care and maintenance”.
By the end of the year both mines are expected to be shut down under care and maintenance with only a skeleton crew at each, the spokesman said.
“We will be looking at relocating people where ever we can to Black Swan or Lake Johnston,” he said.
The spokesman stressed that the company's Black Swan sulphide nickel open pit mine at the same location as the Silver Swan mine, 53 kilometres north-east of Kalgoorlie, was unaffected by the shut down of the underground operation.
The Norilsk Nickel Australia website states that there were a total of 380 staff and contractors employed at the Black Swan and Silver Swan operations.
The company spokesman said workers at Silver Swan and Waterloo – 40 kilometres south of Leinster – were “predominantly” residents from Kalgoorlie-Boulder and Leinster, with some “fly-in, fly-out from Perth”.
The Black Swan and Lake Johnson - an underground mine and processing plant 145 kilometres south of Coolgardie - remain Norilsk's only WA nickel-producing mines not under a cloud of impending closure.
Industry commentators have speculated the company may also partially shut down or sell part of its Honeymoon Well nickel project south of Wiluna. However, the company spokesman said that “at this stage” there was no suggestion that would happen.
The spokesman said Norilsk Nickel Australia had been reviewing its operations and working on a rationalisation plan for the past six months.
“The recovery costs (for nickel) have been rising and the nickel price has been falling. It is not much of an equation to work out when operations become uneconomic,” the spokesman said.
“Both the Silver Swan and Waterloo operations had a limited life span. These things would have closed down at some stage irrespective of the current situation,” he said.
Last week the Russian Norilsk Nickel Group – the world's largest producer of nickel and palladium and owner of the Australian company - announced it may close or sell some of its overseas units and warned shareholders to expect a drop of up to 75 per cent in profit.
Norilsk acquired the Cawse mine when it took over US-based OMG in March last year and the Silver and Black Swan mines and Waterloo mine when it bought the Australian assets of Canadian-based LionOre in August last year. At the time of the acquisitions world prices for nickel were at near record highs.
Two weeks ago Consolidated Minerals announced it was placing its Kambalda-based nickel mining operations into care and maintenance with the transition to be completed by the middle of next month.
Consolidated Minerals said the shut downs would see 78 employees retrenched and 55 contractors lose their jobs.