Tara Mines has warned its 600-strong workforce that production costs must be reduced by almost 13 per cent if a closure is to be averted. A general meeting of members of SIPTU, the main union at the mine, is due in Navan at the weekend to consider the proposals, which are aimed at making the mine competitive.
The company says the new targets must be met by June 1st. But SIPTU regional secretary Mr Jack O'Connor accused the company last night of attempting to "move the goal posts". He said the unions and employees had honoured all the commitments entered into in a productivity deal struck in February 1998.
The plummeting value of zinc has caused the problem at Tara Mines, according to the company. The current price for concentrated zinc is $993 a ton, compared with $1,600 two years ago. Current production costs at Navan are $1,150 per ton, compared with an industry norm of $1,003.
Tara's Finnish owner, Outokompu, says it wants the Irish operation to reach the industry norm by June 1st. The mine's human resource manager, Mr Colm Connachy, said the company could not rule out further cutbacks. "Nothing is guaranteed in this business, but if we had achieved the previous changes sought from the unions in 1996, we would be competitive now."
It took until February 1998 and a threatened closure of the mine to force through drastic changes in production methods. At the time a joint union-management approach to problem-solving was also adopted, which succeeded in significantly reducing costs.
Production costs for Navan ore since then have been reduced from £21 a ton to £19.83. This is almost in line with the targets set in February 1998, but Mr Connachy says that a further £3 a ton reduction is now needed. He also points out that far from achieving the significant redundancies envisaged in the plan, employment figures have actually gone up.
Asked about fears among the workers that further cutbacks will be sought if they accept the latest changes, Mr Connachy said: "If we achieve these targets we will certainly need continuous improvement to be maintained. But these changes give us a base on which we can maintain competitiveness. The bottom line is that we have to get our production costs down."
However, Mr O'Connor expressed concern at the company's approach last night, although he said he was reluctant to comment before having studied the proposals in detail. "The fact of the matter is that the unions and employees have honoured all of their agreements with the company.
"The joint approach agreed last year has yielded significant results, even to the extent that, by the end of March, production targets had been exceeded and cost control was within an ace of achievement. The reality of the situation is that the goal posts have been very significantly moved again."
He was sceptical of whether the workers "have been apprised of Outokompu's real agenda. I am reluctant to comment further until we have completed our analysis in order to make a judgment as to whether there is another agenda".
One concern that must exercise the minds of trade union negotiators is that, given current zinc prices, the company could actually save money if a dispute closed the mine. On the other hand, the joint approach to tackling problems at Navan has achieved considerable improvements in production. A strike, or lockout, could seriously damage long-term relations between the company and its local workforce.