Wolverine mine shutdown not a shock to industry insiders
The shutdown at the Wolverine mine in southeast Yukon does not surprise industry insiders who say many mining companies are having trouble coping with an economic slump in the industry.
Chinese-owned, Yukon Zinc, has closed its operation north of Watson Lake saying it may re-open in several months, but its future is unclear.
The company issued a release Tuesday that says 140 Yukon Zinc employees will be laid off over the next few weeks and another 80 positions filled by contractors are also affected.
“This is a very difficult decision and we understand the impact it has on our employees, contractors and local communities.” says the company's chairman, Jingyou Lu.
“We will continue to review the situation and decide the best way forward," he says.
The Wolverine Mine has been operating at around 75 per cent of its capacity since October 2013.
'Is it a reflection of what's happening in China?'
Michael Hitch, an associate professor at the Norman B. Keevil Institute of Mining Engineering at UBC and with years of experience in the mining industry, says the Wolverine mine shut down raises questions about China's overseas investments.
Hitch thinks China is re-evaluating some of its overseas investments because lower coal prices throughout the world are causing a domino effect on other mining commodities.
"What operators are finding is they just can't make those margins make sense. Operating costs are high, global prices are low and things just can't be met, bills can't be paid," Hitch says,.
Samson Hartland, executive director of the Yukon Chamber of Mines, says news of the shutdown isn't surprising given the slump the industry has fallen into with low prices and little interest from investors.
"What this really underlines for us is the need to decrease the operating cost of doing business in Canada's North," Hartland says.
The shutdown has come to light at the same time Yukon's premier Darrell Pasloski and his ministers are in Vancouver at the Mineral Exploration Roundup pitching the territory as a good place to do business.
Hitch says it's unfortunate the closure happened just when the public's eye is on the mining sector.
"I think everybody is feeling it and there's probably a few less beers being consumed," he says.
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