Mine's fate due to ore price and age

Tara Mines is the most costly plant in the Finnish-owned Outo kompu group, which has 14,000 employees worldwide

Tara Mines is the most costly plant in the Finnish-owned Outo kompu group, which has 14,000 employees worldwide. Tara is also costlier to operate than 90 per cent of its competitors. Even if the 150 miners were to take pay cuts of £10,000 to £12,000 which they say would result from the management survival plan, they would still be earning significantly more than their counterparts at Galmoy, who are on about £20,000 a year.

The fundamental difference between the two plants is age. Tara is old, 24 years to be precise, and Galmoy is new. SIPTU represents workers in both mines and in May 1998 it used the high rates paid at Tara, £34,000 to £40,000 a year, to support a significant pay claim for the Galmoy miners, who were then on around £16,000.

Given time, Galmoy's rates will also rise. But with a much smaller ore body, it will have a much shorter lifespan, and it is unlikely the workers will achieve the high rates enjoyed at Navan.

Plunging zinc prices, down from $1,600 a ton to $958 in a year, made it imperative to reduce costs at Tara. Prices have begun to recover and are currently running just below $1,200 a ton. However, this still leaves the Navan plant in the marginal bracket, only worth operating when prices peak.

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Outokompu wants to reduce operating costs by 15 per cent and increase productivity by 23 per cent. It says the targets in its plan can be met, and miners can maintain their overall earnings, if they work harder and "smarter".

Here again, the age factor comes into play. There has been very little development mining at Navan in recent years. The ore being extracted has only 6.5 per cent ore concentrate, compared with 8 or 10 per cent in the richer seams. It will cost £75 million over three years to access the remaining better-quality seams.

The age factor also plays a role on the human level. Many employees, particularly miners, have been with the company since it began 25 years ago.

As one observer said: "They have the mortgage paid and the kids reared. There is no way they want to work longer hours for less money."

Many of them would gladly take a decent redundancy package if it was on offer. The trouble is the company appears no more willing to pay redundancy than it does to maintain current earnings. It simply wants to lay everybody off.

The chairman of the craft group of unions at the mine, Mr Eamon Devoy, says the company will not be allowed to close "on the cheap".

The SIPTU regional secretary, Mr Jack O'Connor, who represents the bulk of the workforce, describes the mood of members as "one of subdued resignation, combined with a resolve to ensure that a shovel-full of zinc will never be recovered from that mine without a fair settlement".