PNG’s state-owned copper mine is undergoing a radical restructuring which will result in a 25% workforce cut and see the company move to a Fly-In, Fly-Out operation, according to Managing Director and CEO, Peter Graham.
The Ok Tedi mine. Credit: PNGSDP
The Ok Tedi Mining Company (OTML) suspended its mine operations on 12 August, prompted by low water levels on the Fly River, which prevented the transportation of its copper concentrate.
Combined with ‘a slump’ in global metal prices, the suspension has now forced the company to cut costs, Graham has told staff in a ‘Toksave’ or email newsletter.
He told staff, however, he expects mine operations to resume in February/March, depending on the weather.
But before then, he said, there will be major changes covering staff numbers, rosters, terms and conditions of employment and the contracting out of some services.
The current workforce will be reduced by more than 10%, before mine operations recommence, and the contracting out of some job functions to local companies will mean ‘a further 15% reduction in direct jobs with OTML’, he said.
Graham said the total current workforce was 1500.
Fly-in, fly-out
Ok Tedi Mining’s Peter Graham
‘The company is moving to become essentially a fly in–fly out (FIFO) operation from its current level of two-thirds, and employees will follow a set roster, depending on where they work,’ he said.
‘Working the set roster is a condition of employment,’ says Graham.
‘There is no flexibility to change days or have time off. Employees will need to decide for themselves if these roster conditions suit them.’
New terms and conditions will be introduced for the staff who are being retained. OTML employees whose positions are retrenched will be paid a redundancy.
Changes at Tabubil
As the majority of employees will be FIFO, says Graham, the residential make-up of Tabubil town will change.
‘Generally, families will not be on-site and employees will be in dongas and share accommodation.’
It costs a lot to run the town, Graham told the ABC this week, and it’s a cost that other mining operations dealt with ‘some years ago’ and Ok Tedi ‘is catching up’.
Tabubil International School, which is currently closed for the dry weather stand down, will not re-open, but Tabubil Hospital will stay open and OTML will continue to collect rubbish, operate the sewerage plant, and carry out road maintenance, Graham said.
USD 0.2672
AUD 0.4040
GBP 0.2104
EUR 0.2469
NZD 0.4353
JPY 39.39
SGD 0.3578
Only 2 comments were made in light of the structural adjustments executed by the Master; Mr Peter Graham which I see as a master piece in getting OKTEDI into prosperity at the time of weaker metal prices. Peter is right and I totally agree in principle. On the other hand, we have excellent facilities which must be utilized by our locals when they are left idle due to the workers being scheduled on FIFO arrangements on a fixed roster basis. this means economic activities especially at the micro level will slow down as family members will no longer enjoy this privileges any more as they use to whilst living on sit before. Furthermore the 25% reduction in employment will also have an impact on the availability of disposable income thus shall slow down activities at the micro level. My request to OTML management and the Government is to effect the pay out of the long waited 9.1% equity to the Mine Villages considering SME Establishments and Investments into other activities which may generate income thus alleviating poverty in a wake to stimulate Micro economic activities at Tabubil. Land owners concerned must consider OTML’s strategy and must adapt to changes as its an external factor having influence in the way business is conducted in Tabubil. Can the facilities of the International School and several properties unoccupied be utilized by LO organisations under MOUs with OTDF and OKTEDI ?
Thanks
Elias Elwai Williams
Reduce number of General Manager as well. So many of them that make company fat and move like dinosaurus…Ok Tedi may just need 3 GM: GM Operations, GM Support, and GM Commercial…
If the company wants reduce workforce, please reduce from the other departments but not in mine & mill because those 2 departments company really depends on to make it’s come back.
Thanks,
Philip