35 jobs to go as goldmine closes

JO MCKENZIE-MCLEAN
Last updated 05:00 19/08/2014

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Thirty-five people will lose their jobs when a Central Otago goldmining operation shuts down next month.

Mintago Investments Ltd - part of the L&M Group, a New Zealand-owned natural resource group of companies based in Christchurch - announced yesterday its Earnscleugh Gold Project would complete its current dredge path at the end of next month and stop mining operations.

Spokeswoman Shirley Herridge said the project, which had been scheduled to finish in 2016, would be shut down earlier because of poor gold prices.

"Since the operation started the New Zealand-US dollar exchange rate had increased from 0.65 to 0.85, reducing the New Zealand-dollar gold price from $2000 to $1500 per ounce, continuously challenging the viability of the mine."

She would not comment on how much gold had been extracted since it started in July 2009.

The closure of the operation would result in 35 job losses, although some would be retained for short-term, she said.

"Through the stewardship of mine manager Mark Coleman and staff, a series of expansions and innovations have been implemented, which have kept the dredging operation on a course of continuous improvement."

Despite early resistance from some locals who formed the Earnscleugh Gold Mine Action Group, the operation had enjoyed a positive relationship with the community, she said.

"I think [their opposition] was more based on a lack of understanding on the part of the Gold Mine Action Group - what the mining process would involve."

Former action group member Helena Heydelaaar said although she had initial reservations, she had been happy with the operation and efforts to mitigate noise and dust. There had also been economic benefit through jobs, she said.

"They lived here, their children go to school here and the money goes around. I hope when the price of gold goes up they open again."

Central Otago District Council economic development manager Warwick Hawker said the council was advised of the closure yesterday.

"We have not had a lot of time to look at it but obviously the loss of jobs is most unfortunate and our sympathies go to those involved. I understand they were getting reasonably good salaries and that will have some impact on the community . . . unfortunately that's the way life is, especially in industries sensitive to international prices and exchange rates. Both are moving in directions that are not helping mining at the moment."

Herridge said the company would rehabilitate the mine site for future agricultural use, leaving the land in a better state than when it was acquired.

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"Continuous rehabilitation has been ongoing since 2012 creating quality pasture from previously unproductive land. This philosophy is consistent with L&M Group's rehabilitation at earlier projects at Glenore, Nokomai, Arahura, Rimu and others since the 1990s."

- The Southland Times

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