Canadian miner New Millennium Iron Corporation (NML) has decided to downsize its workforce by around 30 per cent.
Tata Steel has a 26.2 per cent stake in the company.
The company said it would implement the “human resource restructuring plan”, which included a workforce reduction of 12 full-time employees, or around 30 per cent of the company’s total strength of 38 people.
Through the job cuts, NML expects to save C$1.52 million ($1.35 million) annually. However, the severance packages would entail a one-time cost, which is now being worked out.
The company said the restructuring exercise was in response to the present difficult commodity market.
“One-time charges associated with the restructuring are currently being finalised,” it said in a statement to the Toronto Stock Exchange. The restructuring will take place in the fourth (October-December) quarter, it added.
Combined with other cost-saving measures undertaken this year, the restructuring is expected to provide NML with sufficient working capital to support activities through 2016 at current expenditure levels. The company also wants to conserve resources for its proposed low-grade iron ore (taconite) project.
NML has already begun trial shipping of ores to Tata Steel’s European operations.
Tata Steel has exclusive option for entire offtake of produce from this direct shipping ore project.
The DSO Project is owned and operated by Tata Steel Minerals Canada Ltd (TSMC), an 80:20 per cent joint venture of Tata Steel and NML. The investments for the taconite project, in which Tata Steel is also the strategic partner, are being firmed up.