If Tara Mines closes, it will be bad news for Navan, bad news for the Finnish owners Outokumpu and bad news for social partnership in Ireland. If operations cease, it will be because the workforce and company could not agree on new, and cheaper ways of exploiting remaining reserves of 290,000 tonnes of zinc concentrate and 64,000 tonnes of lead concentrate worth more than £300 million.
Costs have always been a critical factor in Tara's operations. It has made losses during most of its 20-year existence. The last year when the mine recorded a profit was 1992, when it made £9 million on a turnover of £120 million.
It is also expected to record a profit for 1997, when zinc prices rose to $1,600 (£1,143) a tonne. (Zinc comprises 90 per cent of output in value terms.) But prices have now slumped to $900 and past figures suggest that whenever zinc prices fall much below $1,100 a tonne, Tara is a loss-making operation.
According to Outokumpu, which bought out the Canadian firm Noranada in 1986 and the Government's 25 per cent in 1989, Tara compares badly with its other operations and with international competitors. In July 1996, when Outokumpu presented its rescue plan "Tara 2005" to the unions, it quoted figures showing that wage costs were higher than in 90 per cent of the company's competitors, while the quality of the ore was lower than in 72 per cent of competing mines.
These costs are set to disimprove as the most easily accessible ore has been worked out. Of the remaining reserves, 10 million tonnes, or almost half, is tied up in semi-permanent pillars supporting shafts and machinery systems. With wages making up 54 per cent of operating costs, the company told unions it would be impossible to achieve significant cost efficiencies without major cuts in the high price of labour.
Productivity would have to increase by 25 per cent and the cost of extracting a tonne of zinc reduced from £21 a tonne to £18, if the plant's long-term viability were to be preserved. To achieve these objectives it wanted radical changes in work practices and the shedding of at least 120 jobs.
As one trade union source said at the time, the proposals were "Draconian" and seemed set to lead to a major dispute. The unions and local management persuaded the workforce and Outokumpu to opt for a different "partnership" route.
A joint steering committee (JSC) was set up consisting of six trade union representatives and three management members. It was the first time the two sides had attempted to resolve problems through anything other than the traditional confrontational mode.
The results were subsequently widely hailed in industrial relations circles. Agreement was quickly reached on the redundancy package and most of the cuts sought have already been achieved.
The JSC also managed to achieve most of the targets set in Tara 2005. Productivity could be increased by 25 per cent and costs reduced by £2.40p a tonne by means that required less drastic changes in work practices than originally sought and, most importantly, it gave firmer guarantees that existing earnings would be protected.
All that remained was for the workers to vote for the JSC proposals. All of the craftworkers, technical, clerical and administrative staff voted before Christmas to accept the proposals. The margin in favour was overwhelming amongst white collar employees, but the craftworkers accepted them by a majority of one.
It was always expected that the vote amongst the 280 miners and general operatives, almost half the workforce, would be tight. However unions and management appeared to be genuinely shocked on January 9th, when these workers rejected the JSC proposals by a margin of two to one.
The main reason appears to be that miners and their back-up crews in the production area are being asked to concede some of the biggest changes in work practices. Already operating in a dirty, dark and dangerous environment, they feel that even the proposed halving of their shift break from 30 minutes to 15 is too much. Traditionally, the miners have been the most militant and conservative element in the workforce. They have seen the mine threatened with closure before and may believe the company is bluffing.
However, having lost more than a year in what proved a futile exercise in social partnership, the company has been in no mood to go back to the drawing board. While it has given "clarifications" to the unions on a number of points in the JSC proposals, it has offered no significant change.
The Labour Court is not expected to propose any major changes in its recommendation, given the clear signal from the company during last week's talks that it has little or nothing left to give. Tara Mines says the only alternatives to the JSC proposals are the more Draconian ones contained in Tara 2005, or closure.
It also says that the new work practices must be introduced from Sunday, if the mine is to stay open. Tomorrow the workers meet to consider the stark choices.
In the complex world of industrial relations the precipice is never quite as near as it seems, but both sides are certainly well able to peer over the edge this weekend.
SIPTU, the union which represents the miners, must be particularly concerned. After weeks of preaching the merits of social partnership to IBEC, the Government and Ryanair, it could do without the Tara Mines dispute.
