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.