Vale Inco Ltd. said Tuesday it will cut more than 400 white-collar jobs in Canada as it continues to restructure its operations amid slumping nickel prices.
The Toronto-based miner said it will cut 900 jobs worldwide, mainly from its corporate, management and business support functions, and the bulk of layoffs in Canada will fall at its major nickel operations in northern Ontario.
"It's really a reaction to very challenging market conditions," said Vale Inco spokesman Cory McPhee.
"We announced production cutbacks in December and we have been instituting internally a number of measures to control spending, but we did an exhaustive review of our company and our management structures in particular at the same time as we're monitoring the market and it was clear that more was required."
McPhee said the cuts include 261 layoffs in Sudbury; 24 at its mines in Thompson, Man.; 39 at its nickel-copper-cobalt deposit in Labrador; 74 at its technology centre in Mississauga, Ont., six at its refinery in Port Colborne, Ont., and 19 at its headquarters in Toronto.
"At this point in time, there are no further moves planned," McPhee said.
"Having said that, no one can predict what's going to happen with the market, so we're going to continue to monitor the situation and if there are moves required for the health of the business, then we'll have to consider those."
Vale Inco president and chief executive Tito Martins said in a statement that reduced demand for nickel means the company's current operations are "simply not sustainable."
Industry Minister Tony Clement told the House of Commons the federal government is reviewing an agreement with the company not to cut jobs until October 2009.
"We're reviewing the Investment Canada Act provisions and how they pertain to Vale Inco," Clement said during Question Period.
"We expect Vale Inco to measure up, to honour their commitments that they've made to the government of Canada to the people of Canada and we'll be examining the situation closely."
The company announced in December that it would cut 1,300 jobs from its global workforce of about 14,000. It also cut production at its nickel operations in Sudbury.
Formerly Inco, one of Canada's largest independent mining companies, Vale Inco is now the core nickel business of Brazil's Vale (NYSE:RIO) (formally known as Companhia Vale do Rio Doce).
Before the cuts, Vale Inco employed approximately 6,600 people in Canada.
Tuesday's cuts reflect tough times in the Canadian mining industry, as companies cut jobs and shut down mines in reaction to falling prices and slumping demand for nickel, copper, zinc, aluminum and other base metals.
Nickel has been hit particularly hard. The price of the metal was hovering around US$4.30 per pound Tuesday. Nickel prices soared above $20 a pound in early 2007 before plunging along with the stock markets and the economic outlook in late 2008.
Northern Ontario has been hit particularly hard by the slump in the industry, as the region relies on its nickel and copper mines, among others, for a large chunk of its employment.
Xstrata Nickel, the former Falconbridge Ltd., laid off 686 salaried and unionized employees at its mine in Sudbury last month.
This year alone, mineral production generated $10 billion and exploration activities amounted to a $600-million industry in Ontario.
