Management at Brunswick launches cost-cutting effort

Management at Brunswick Mining and Smelting’s (TSE) No 12. mine is struggling to control costs in the aftermath of a 10-month strike that decimated the company’s balance sheet and knocked the wind out of this coastal town.

Since production resumed in early May, the underground lead-zinc mine has slashed its workforce by 12% (125 employees) and virtually eliminated overtime work. Senior personnel say the cuts will continue indefinitely. A change in mining methods is also expected to reduce costs over the long term. On the mine’s main production level at 850 metres, the switch over from mechanized cut-and-fill mining to open stoping is almost complete. As The Northern Miner observed during a visit to the site, the new method requires fewer workers and cuts down on the need for expensive ground support. Although everyone is relieved as the prolonged strike is over, it forced management to wake up to some of the realities facing the aging mine. During the strike, secretaries replaced burly scooptram operators, white-collar supervisors donned coveralls, and some previously overlooked inefficiencies began to emerge.

“There was a real learning curve for not only the engineers but for the supervisors,” said mine superintendent Fred Herman. “Everything we learned during the strike has been applied to our manpower and production estimates.” Brunswick’s management style is also changing. Using the “full scope” approach, employees will be expected to do “everything they were trained to do,” including jobs ranging from pipe-fitting to welding. Regular seminars are educating employees about the costs associated with mining as well as the fundamentals of metal markets.

The new strategies appear to be working. In August, the remaining union members racked up record production at 55 tonnes per man shift, for a monthly output of about 300,000 tonnes. Zinc recoveries averaged 82.5%, compared with 81.05% for the year to date.

But, despite the improvements, the mine will continue to lose money this year, and probably well into 1992, said general superintendent Herb Scott. In the second quarter, No. 12 contributed to a $10.1-million loss for Brunswick Mining. Zinc prices, hovering at about 45 cents per lb. compared with 72 cents in the first six months of 1990, remain the wild card. In the meantime, an $8-million annual exploration drive to find more ore in the Bathurst camp will continue. As primary reserves at the 27-year-old mine are depleted over the next seven years, secondary and tertiary muck (including sill pillars) will represent a growing proportion of minable ore. As of Dec. 31, 1990, minable reserves were estimated to be 71 million tonnes averaging 8.87% zinc, 3.59% lead and 0.29% copper. Without new reserves, production will begin to taper off toward the end of the decade. “We’ve gone from being a young mine to being a mature mine very quickly,” Herman told The Northern Miner. “The next three years here are critical. They will shape what we are able to do for the life of the mine.”