Cape Breton's Donkin coal mine lays off 49 people

With the resurgence of coal mining in Cape Breton has come another all-too-familiar happening: layoffs.

During a meeting at the Donkin mine Tuesday morning, 49 of 130 employees were informed they are losing their jobs. The layoffs are effective immediately and they are permanent.

Shannon Campbell, vice-president of the mine, which is operated by Kameron Coal Management Limited, said a "critical change" was required to make the operation more economically viable.

Mining for sustainability

"Right now Donkin mine is in an economically untenable situation," Campbell said in an interview.

"We're trying to reduce the operating costs that we're [facing] at the mine to be able to make some changes, which will enable us to get this mine on much more solid, sustainable footing."

Since beginning production at the mine in March, Campbell said they've encountered far more challenging conditions and geological formations underground than expected. They've learned the equipment they're using "isn't well suited to what we want it to do," he said.

"Unfortunately, productivity is well short of where it needs to be in order to be a sustainable operation," he said.

"We've not seen a deposit quite like this one."

'A pile of crap'

Theo Musial, a licenced electrician and one of the 49 laid off, said he was surprised by the news.

He wasn't buying the company's explanation, especially because most of the people laid off were the most experienced. He called it "a pile of crap."

"I guess we're not productive because we're the guys they got rid of," he said.

"A lot of the people in the room are like me, they've probably got well over 30 years of mining experience."

Musial said the folks scheduled for the midnight shift were told not to come out and instead attended this morning's meeting with the whole workforce.

"We didn't know what the meeting was for, but we soon found out when we got there."

As a former miner with Devco, Musial said the mine looks pretty good and things are being done "fairly safely."

"There's a great seam of coal. They got good production there; they'll have a long-life mine if it's run right."

'It is what it is'

Brandon Howell said he hoped he'd eventually be able to find his way back to the mine when it's in a position to expand again.

"They're going to have to have other mining crews and the only experienced miners they have right now are the guys they let go," he said as he was leaving the worksite.

"It's not something I was looking forward to this close to Christmas and all, but it is what it is."

Campbell wouldn't get into specifics, citing the fact the company is private, but he said productivity is about half of where Kameron, a subsidiary of the Cline Group, wanted it to be. At the onset of operations, the goal for the first year was to mine about a half-million tonnes of coal.

"We'd be hard pressed to meet a half-million tonnes in Year 1," said Campbell.

Solving the problem is going to require the purchase of different mining equipment and a different mining plan, and that's going to take time because it must all go through government regulatory approval first. Campbell said it's impossible to guess how long the process will take.

Workers will get transition pay

Because the mine is underwater, Campbell said it was only through the test mining process that the company was able to truly understand the conditions they were facing. Had they known the full situation ahead of time, he said they would have initially purchased the equipment they are now pursuing.

"We understood that this could happen."

In the meantime, the company must find ways to reduce its costs and that led to Tuesday's layoffs. While the company isn't required by the labour code to offer outgoing employees anything, Campbell said the 49 people would get a transition payment equal to about eight weeks of straight time wages.

'A few bumps in the road'

The goal now is to get the new equipment and updated mine plan approved, make the mine productive and then restart the hiring process, said Campbell. The news is surely a blow to a community that desperately needs jobs and largely welcomed the operation with open arms.

Despite the setback, Campbell said Kameron has no plans to back away from the operation.

"This mine is going to be a success story for Cape Breton. There's going to be a few bumps in the road and we just hit one. We will get through it and we will make this mine safe and profitable for the long term."