Xstrata warns of job losses if mine operations remain stalled

Swiss mining giant Xstrata has warned that 300 jobs at McArthur River Mine in the Northern Territories in Australia could be lost unless the Federal government guarantees the mine's future following the Federal Court's ruling, terming the mine's river diversion flawed.

New ore has not been mined since 17 December following the court ruling that the previous government did not follow proper processes when allowing an expansion. 

 Xstrata  also said that  zinc and lead ore stockpiles would likely run out by 26 January, celebrated as Australia Day, and workers would be axed if government failed to decide whether the $110 million open-pit mine could continue.

The trouble stems from Xstrata's conversion of  its underground zinc mine to an open-pit mine and diversion of the river to keep the mine going for another 20 years.

According to the Miscellaneous Workers Union if 300 workers lose jobs, they may not get their full entitlements as they are not covered by collective agreements. Unions have also reported that workers are being forced to work longer hours for inadequate pay.

Before the wet season, aboriginal landowners, in whose favor the court decided, had asked the company to fill in the recently dug diversion channels to prevent permanent ecological damage. Australian environment minister Peter Garett who had talks with both Xstrata and aboriginals indicated that there was little chance of approval by January 26 as his decision would have to be followed by a 10 business day consultation period with other government ministers prior to a final decision.