24 Kitikmeot jobs lost in Lupin shutdown

Nunavut’s “neglected” region copes with economic shock


The people of the western Kitikmeot will lose at least 24 high-paying jobs as gold production grinds to a halt at the Lupin Mine on Contwoyto Lake.

Nunavut’s last working mine suspended operations last week, reducing mineral production in the territory to zero for the foreseeable future.

Though world gold prices are now high, operating costs at Lupin’s aging ore-body are even higher, forcing its owner, Kinross Gold Corp. of Toronto, to mothball the mine’s operations pending a complete review of its future.

The decision affects 235 full-time fly-in, fly-out workers, and 70 contract employees. About 40 workers are residents of Nunavut and the Northwest Territories.

Of those, at least 24 live in the western Kitikmeot.

“There are a lot of families that are going to be affected, and there are a lot of families in this region whose major source of income is Lupin. You know it’s going to affect people,” said Charlie Lyall, president of the beneficiary-owned Kitikmeot Corporation.

When asked in a telephone interview if he expects any help from the Government of Nunavut, Lyall gave a loud, mocking laugh.

“I learned a long time ago not to make any assumptions with the Government of Nunavut whatsoever,” Lyall said. “The problem that we have in this region is that we are so ignored by that side of the territory [Iqaluit]. I’m not that optimistic.”

The Kitikmeot’s mining potential is enormous, notwithstanding the Lupin shutdown, but Lyall said the GN doesn’t realize that.

“It’s the future of the economic development of Nunavut. There’s no doubt about that. I fail to understand the government,” Lyall said.

Alex Buchan, economic development officer for the municipality of Kugluktuk, said with some retraining, most of the laid-off Lupin workers could eventually get new jobs.

“I think that it is bad news for the community and the workers. In the long run, I don’t think that these workers will have a serious difficulty in obtaining employment elsewhere. There are options. Maybe they involve retraining or additional training or what-not, but I think it is still possible for these individuals to obtain work.”

Kugluktuk is the hardest-hit community with at least 14 family breadwinners expecting layoff notices.

Those are jobs the community can ill afford to lose. Nunavut’s 2001 household survey showed that Kugluktuk’s real unemployment rate stood at 28.5 per cent at the time of the survey.

And Buchan said the hamlet’s employment officer is already overworked dealing with some of the staff shift changes at Diavik and Ekati diamond mines.

Buchan said it’s workers who held high-paying underground jobs who will have the hardest time finding new work.

That’s because most new mines proposed for the region would be above-ground, open-pit operations. One exception is Miramar’s Hope Bay gold mine – but that project is still tied up in regulatory red tape, and it is only projected to last for two years when it does start up.

Kugluktuk’s hamlet council was to have met this Monday night to discuss the impact of the Lupin shutdown.

In an interview last week, Keith Peterson, the mayor of Cambridge Bay, said at least 10 workers in his community would be affected by the Lupin layoffs. Those jobs represent $400,000 a year in wages.

But he said the region is better prepared to handle the economic shock of a mine shutdown than it was in 1998, when Lupin suspended operations for two years.

“I guess that you could say the temporary closure a few years ago was kind of a wake-up call. Instead of folks waiting for mines to come along, we got more proactive and worked more closely with the companies that are developing mines and the companies that are exploring for new minerals,” Peterson said.

Cambridge Bay’s real unemployment rate in 2001 was 17.5 per cent.

Meanwhile, Ted Rutherglen, Lupin’s manager of human resources, was busy sending out layoff notices to employees last week.

Rutherglen would not comment on whether or not Kinross might close the mine for good if its review was negative.

But the prognosis isn’t good. The effects of a rising Canadian dollar have wiped out any benefits the company achieved from cost-cutting efforts last May, when they dumped 75 workers.

Lupin has been producing gold at a cost of $409 an ounce – but Kinross has been selling it for only $345 an ounce, creating big losses for the company.

“At this time, our costs are extremely high and an aggressive effort has been put forward to reduce the costs, but we have not been able to achieve that,” Rutherglen said.

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