The Groote Eylandt Mining Company (GEMCO) mine has begun consultations with staff as it grapples with soaring production costs and persistent flooding impacts. The ABC understands the operation needs to cut $129 million from the business in response to costs increasing by more than 80 per cent in recent years.
The island and mine site were hit hard by Tropical Cyclone Megan in March 2024, but multiple wet seasons and persistent seepage of groundwater into the pits are also responsible. The island's loading wharf was destroyed in 2024 when the cyclone pushed a loaded bulk carrier into the structure during high tides.
A South32 spokesperson said the company would make changes to strengthen its long-term viability and was speaking to workers. "GEMCO has completed an internal review in response to a more challenging operating environment and increased cost pressures, and has begun implementing changes designed to strengthen the long-term sustainability of the business," the spokesperson said. "As part of this work, GEMCO has reviewed its workforce requirements and commenced consultation with employees and contractors who will potentially be impacted. This is not something we take lightly and our priority is to support affected employees through the process, including exploring redeployment opportunities where possible."
GEMCO is planning to spend about $100 million on new water infrastructure in the next two years if it receives regulatory approvals.
Union officials believe office staff would likely be the target of redundancies. The Northern Territory branch of the Construction, Forestry and Maritime Employees Union (CFMEU) said it was closely monitoring the situation to see if blue-collar workers were affected. Union officials were told South32 management would provide staff with more information about the redundancies by the end of the week.
Under GEMCO's enterprise bargaining agreement, which expires at the end of 2027, the company must consult with workers before making significant organisational changes.