Hydro obliged to save jobs at Elliot Lake: union boss

The Ontario director of the United Steelworkers of America says Ontario Hydro has an obligation to protect the livelihoods of 660 mine workers who still have jobs at Denison Mines’ (TSE) Elliot Lake, Ont., uranium operation. Speaking at a news conference in Toronto recently, Leo Gerard said many Denison and Rio Algom (TSE) employees have invested their life savings in a city he called a model community for the north.

While Hydro is paying Denison roughly five times the market price for uranium, Gerard says the time has come for Ontario Hydro to make a commitment to the miners at Elliot Lake by renewing long-term price contracts that could be cancelled in 1992.

The news conference was called just hours after Denison announced it was laying off 400 employees from the mine this summer and reducing annual production levels to 1.4 million lb. from 2.7 million lb. The layoffs, which bring the number of jobs lost at Elliot Lake to 2,850 in the past 12 months, have raised major concerns about the city’s future.

If Hydro decides to cancel its long-term contract with Denison this month, the resulting job losses could drive unemployment levels up to 5,130 or 63% of the city’s workforce. A Hydro spokesman said the utility could also terminate its price contract with Rio Algom in 1993 if it expresses its intention to do so by the end of this year.

“Today the population has dropped to 14,000 from a peak of 28,000 and we fear it could drop to 10,000 before a new economic plan kicks in,” said Mayor George Farkouh.

While Ontario Hydro officials say they will probably wait unil the end of March before announcing a decision on the Elliot Lake situation, Farkouh and Gerard remain optimistic that the Denison mine can be kept open.

Their optimism is based partly on the outcome of the New Democratic Party’s recent convention in Toronto. The NDP party (not the government) endorsed a policy statement including a recommendation that Hydro buy all of its uranium from mines in Ontario, compared with 70% now. The party also voted to set up a committee of cabinet ministers, union officials and community representatives to develop a survival plan for Elliot Lake.

Gerard says alternative sources of uranium such as Denison’s 45% owned Midwest project in Saskatchewan should never be developed because the higher ore grades make it too dangerous to mine. Grades at the 56-million-lb. Midwest project average 1.25% compared with 0.1% at Elliot Lake.

He said the amount of radiation would be so high that Denison and partners Bow Valley Industries (TSE), Uranerz Exploration and Mining and PNC Exploration would have to use robots in any future mining operation. “But who is going to go down and get the robots when they break?” he said.

While he claimed not to be surprised by the layoff notices, Farkouh said he was caught off guard by the recent collapse of the uranium market. “Our problem is that the announcement came much earlier than we had anticipated and we are now faced with an urgent need to accelerate the wheels that we have already set in motion,” he said.

He was referring to a new strategic plan designed to offset the effects of Elliot Lake’s declining mining sector. Initiatives under the plan include a retirement living program which has already brought 1,400 retirees to Elliot Lake and a new drug and alcohol rehabilitation centre.

Asked if it is fair to make the rest of Ontario citizens pay inflated prices for uranium, Farkouh replied that since the long-term price contacts were signed in 1977, people of Elliot Lake have invested more than $300 million in the community. “Every dollar spent on the mine adds up to a multiplier of several dollars which the provincial government receives from the taxpayers of Ontario.”