Hudbay to close Flin Flon mine

800 jobs on line as operations to cease by 2021

Hudbay Minerals Inc. says it will close its mine in Flin Flon, Man. in 2021, ending hopes it would maintain a threadbare workforce in the town where it employed more than 800 people.

In a memo this week, Robert Assabgui, vice-president of Hudbay’s Manitoba Business Unit, told employees the company had hoped to keep the zinc plant operational, but can’t find enough ore to make it feasible.

“Despite a lot of work over the past few years, the most likely scenario is that mining operations will cease in Flin Flon in 2021,” Assabgui wrote in the memo, also sent to the Financial Post. “As a result, the Flin Flon mill will also cease operations.”

The company said it hopes to transition some of the Flin Flon employees to its operations in Snow Lake, about 210 kilometres away, where it mines and processes copper and zinc.

Most of the zinc is shipped to Flin Flon for processing. But the volume of zinc from Hudbay’s Lalor mine near Snow Lake — about 59,000 tonnes in the past 12 months — isn’t enough by itself to sustain the entire Flin Flon plant.

Assabgui expressed doubt that the company would find enough zinc feed by 2021 to keep the Flin Flon plant operational.

Flin Flon mayor Cal Huntley called it a “significant change” in the history of the town, which was founded in the 1930s and immediately faced the Great Depression.

“There was always another mine," Huntley said. Now, the town’s luck appears to have dried up. This time, "it doesn’t appear that there’s (going to be) another mine.”

Located near the Manitoba-saskatchewan border, Flin Flon is surrounded by lakes. With a greenstone belt running through, base and precious metals are richly distributed throughout the area, and Huntley estimates there have been 30 mines in the past century.

“We’re still fairly confident that there’ll be mines in the area, they may just not be right in Flin Flon,” hesaid.

Hudbay said about 300 of its Flin Flon employees will be eligible for retirement before 2021.

Other employees may be able to transition to Snow Lake, where Hudbay also owns a gold mill that could be brought online to process about 68,000 ounces of gold, and some silver, produced at its Lalor Mine.

But Huntley said that may displace some of the contractors who have been working in Hudbay’s Snow Lake operations.

Lalor, with all its zinc, copper, gold and silver production, only has a nineyear mine life, according to Hudbay.

Flin Flon, with a population of about 5,000, has its own airport and some residents have historically commuted to uranium mines in northern Saskatchewan, according to Huntley.

“Our people can service any trade, whether it’s timber or mining or something new,” he said. “We have three years, we just have to plan for the scenario.”

Hudbay shares closed at $6.75 Thursday in Toronto, up 1.5 per cent. They are down from their 52-week peak of $12.65.