The loss of more than 100 jobs at Macraes open pit as part of
a cost-cutting measure by Oceana Gold has been described by
community leaders as a devastating body blow. It is
understood 106 people will lose their jobs, leaving just 47
to work the open-cast mine.
Oceana Gold managing director and chief executive officer
Mick Wilkes said in a press release that at the present gold
price, the Macraes open pit had a mine-life until the end of
2017, and that of the Frasers underground mine was to
Macraes is New Zealand's largest gold-mining operation,
employing between 600 and 700 staff in the Macraes open pit,
the Frasers underground and the adjacent processing plant.
An estimated 60-70 people attended a private meeting in the
East Otago High School hall in Palmerston yesterday
afternoon, when Oceana Gold announced its intention to
''reoptimise'' its operations at Macraes open pit.
Workers declined to speak to the Otago Daily Times
after the meeting, following company instructions.
Although the mood seemed sombre, workers did not appear
surprised by the announcement.
Dunedin Mayor Dave Cull said it was ''a body blow to some of
our smaller rural communities, although I completely
understand why Oceana Gold needed to make the decision''.
''Gold extraction is subject to forces beyond our control.
''But, this will have a major impact on employment in some
communities and we're very conscious of the need to
ameliorate the effects and help keep those communities
sustainable,'' he said.
The number of job losses was not given by the company, but
Amalgamated Workers Union New Zealand secretary Calvin Fisher
said more than 100 jobs were likely to be lost from the
open-pit crews and mine technicians.
Mr Wilkes said the prolonged and sustained drop in the gold
price had forced the company to reduce costs in order to
sustain its operations.
He said Macraes' new mine plan included a reduction in
material movement and gold production at the open pit, which
meant ''lower equipment usage and a reduction in operating
costs and support staff requirements over the next two
A smaller cutback is planned at the Frasers 6 open pit, which
will begin in the second half of this year.
''The continuing lower gold price has necessitated the need
to make changes to our business to ensure a sustainable
operation at Macraes.
''Unfortunately, these changes will also have an impact on
some of our workforce and contractors, who I wish to thank
and acknowledge for their contribution to Oceana Gold.''
Macraes had been a major employer and contributor to the
Otago region and local economy, and Oceana Gold had developed
a strong long-term relationship with the surrounding
communities, Mr Wilkes said.
It had operated to the highest environmental and social
''As part of our normal course of business, we will continue
to ensure that our business operates as efficiently as
possible without compromising health, safety and the
environment, and we will continue to seek and evaluate
Yesterday's announcement follows cutbacks last year.
Last July, the company announced it would reduce operating
expenditure by about $100 million over the next 18 months
while continuing to look for additional opportunities to
optimise its business.
At the time, Mr Wilkes said the company-wide review was
ongoing to identify additional opportunities to improve cash
flow from Oceana's operations.
And in November last year, Oceana Gold said it would lay off
about 10% of its New Zealand staff as part of a company-wide
Mr Cull said he was given a ''heads up'' from the Oceana Gold
board two days ago that ''management would have to retrench
and that would probably mean job losses''.
''I understand the price of gold has come [down] through a
perceived resurgence in the American economy, where people
are moving out of gold and getting into equities,'' he said.
''It certainly vindicates the council's economic development
strategy, which showed we need to focus on getting into
knowledge-based businesses that are riding the future wave,
not the past wave.''
Mr Fisher told the ODT ''there is no fault or blame
''It's a global phenomenon that is beyond anyone's control.
''Management has done everything they can to keep this mine
open and that has to be acknowledged,'' he said.
''But this is no small loss. This is a loss from a company
with a nine-figure turnover and nine-figure wage bill.''
The price of gold over the past 12 months had had its
greatest drop since 1981, he said.
''No business can sustain that.
''It's a real tragedy, because it has come at a time when the
company had a lot of momentum and had the biggest workforce
in its 20-year history.''
''But, when you're in the gold mining business, you're a
price-taker, not a price-maker.
''This is a result of the global economy forcing gold prices
down,'' Mr Fisher saidUnion delegates would meet Oceana Gold
management later this week, before a final decision on
January 20, he said.
Otago Chamber of Commerce chief executive John Christie said
the cuts were ''devastating'' news.
''They are a big and important employer and they've been part
of our region for over 20 years now, so this won't be welcome
news by the people involved, or the wider community.
''A lot of businesses are dependent on Oceana Gold for
downstream work,'' he said.
''These sorts of decisions aren't made lightly and I'm sure
it's pretty demoralising for the company, as well.''
However, there was also anger in communities affected by the
''They should have announced this before Christmas, before
everybody had spent up on their credit cards. Now, they don't
have jobs,'' an Oceana Gold contractor who wanted to remain
''Oceana Gold have been lying to everybody for years, saying:
`Everything's going to be fine; we're going to work it all
out. Your jobs are secure.' Well, everything is not fine,''
''This is a nightmare scenario for Dunedin and the whole
South Island. It's going to be a big blow for a lot of
''This will destroy towns like Palmerston. It's going to rob
towns of their population, as people are forced to move to
''I only hope they don't let them escape from New Zealand
without paying everybody.''