Nyrstar’s falling share price, job cuts have unions worried about Hobart plant’s workforce
There are concerns over the future of Nyrstar’s Hobart zinc works as the company moves to reduce its workforce amid a plummeting share price.
- Nyrstar’s share price crashes, raising fears about its Hobart smelter
- The company is trying to shed jobs gradually and wants workers to go “on call”
- Unions say workforce is already stretched and losing more jobs would be difficult
The union representing maintenance workers at the Hobart smelter said the workforce had already been stretched too thin, and was worried about the company’s plans to continue reducing job numbers.
In July 2015, then state growth minister Matthew Groom announced a deal to guarantee borrowings of $29 million by Nyrstar from the Export Finance and Insurance Corporation to expand the facility’s capacity to treat a wider range of metals.
Nyrstar had been calling for the deal to help safeguard the future of the now 102-year-old facility.
Mr Groom said the deal was expected to secure 490 jobs at the Lutana plant.
In addition, Nyrstar’s parent company also agreed to take responsibility for any other environmental liabilities at the site.
At the time, Nyrstar’s Swiss-based chief development officer Michael Morley said the Tasmanian Government’s support for that loan was vital to the continued viability of the company’s Tasmanian operation, and acknowledged the company was going through a difficult time.
But the agreement was never formalised after Nyrstar decided not to move forward with the projects linked to the investment.
Last month, the company issued a profit warning, saying its third-quarter earnings had been negatively impacted by market conditions including the falling price of zinc.
Listed on the Belgian stock exchange, Nyrstar has fallen to 2.21 euros, down from 5.28 in late August, and a high of 7.49 over the past year.
‘Low share price not related to price of zinc’
Australian Manufacturers Workers’ Union Tasmanian secretary John Short said Nyrstar had been pushing to introduce an on-call system for workers under the agreement currently being negotiated.
The system would put workers on call after their shift ends.
“Once they’ve got people on call they want to reduce the workforce. Our position is it’s at the lowest level it could possibly be at to work safely,” Mr Short said.
“Quite a few of the workers who have talked to me saying that they believe it’s gotten to the stage where it would be very difficult to lose any more jobs.”
Mr Short said he was worried about the fall in the share price.
“The fortunes of the company generally would be based on the price of zinc and other metals that they produce, but this is obviously a significant drop and it doesn’t mirror the price of zinc, so there’s obviously some other things happening in the background that we’re probably not necessarily aware of,” he said.
As an indication the company was tightening its belt, Australian Workers’ Union organiser Kevin Midson said workers could not access protective gear such as boots or gloves without approval from the plant’s general manager.
Mr Midson echoed concerns about continued staffing reductions and a lack of investment in safety and maintenance, and said he raised the concerns with the general manager last week.
Nyrstar cutting jobs gradually
Nyrstar has indicated it plans to continue reducing the workforce at the Hobart smelter.
A company spokeswoman said gradual reductions were occurring in the Hobart workforce, and natural attrition and voluntary redundancy were the preferred reduction methods.
She pointed out that close to 50 per cent of the workforce was aged over 50.
“Great care is being taken to minimise the impact on employees, and a thorough consultation process is being undertaken before any changes are implemented,” she said.
A government spokesman said if the smelter was to close, legacy environmental issues would be dealt with through a decommissioning and rehabilitation plan with the Environmental Protection Authority, but it is unclear whether the Government or Nyrstar would be responsible.
Nyrstar said it had invested in some alternative projects after deciding not to proceed with the loan guaranteed by the Tasmanian Government.
The company has operations in Europe, the USA, and Australia.