Coos County’s biggest mining company cut 31 workers Thursday in the face of global economic headwinds and slowing demand for minerals.
Oregon Resources Corp. says it will cut its chromite mining operation from seven days per week to four.
Wayne Knott, chief executive of ORC’s parent company, IDM International, said it was a reluctantly made decision spurred by slowing growth in China and economic uncertainty in Europe.
“These decisions are never made lightly, but if we don’t take action now, potentially everyone could be unemployed,” he said. “So we are doing this for the best interest of the company.”
Seventeen temporary employees and 14 direct employees have been laid off from the company’s 100-strong workforce. Knott said the cuts were across-the-board, including administrators, senior staff, plant operators, and lab workers.
Dan Smith, the company’s vice president of business development, will also depart.
“Unfortunately when the company’s stressed the way it has been, it’s very hard to justify having a VP of business development,” Knott said.
The company has borrowed $5 million dollars to fund the continuance of its operations.
Industry hit hard
IDM International joins the ranks of other mining companies who are adjusting to a faltering global demand for minerals.
ORC is a relatively small player in the industry. It operates solely in Coos County and is the primary source of revenue for Australian-based IDM International.
ORC processes chromite into a specialty sand which is used by factories to create casting molds.
Knott said ORC is more vulnerable than other mining companies because it’s peddling a new product rather than bulk minerals.
“You have to convince foundries to change recipes,” he said. “And that’s pretty tough when economic conditions are uncertain.”
Marketing and lease focus
Despite the bleak economy, Knott remained confident in the company’s future.
“We are putting a lot of focus on our marketing effort so we can position our product when the economy improves,” he said. “And we continue to focus on our permitting and lease operations.”
That pursuit includes an agreement with the Coos County commissioners to mine on county-owned forestland.
“From our view this is a temporary thing,” he said. “We can respond quickly as demand increases. We are in a position to meet immediate customers needs and more.”
For now, ORC will cut the amount of chromite it processes by about half.
It’s been a heavy week for everyone at IDM International, including Knott, who took the reins as chief executive only four days ago.
Philip Garratt stepped down as CEO earlier this year. He was replaced temporarily by the company’s chairman before the board appointed Knott on Monday, a South African with 27 years of experience in the mining industry.
Knott joined ORC in June, replacing Dan Smith as chief operating officer.
Smith has been the face of ORC since the company first broke ground in Coos County. He became IDM International’s vice president of business development.
Knott said it was difficult to see the departure of one of the company’s most valued employees.
“Dan did contribute a lot to this organization,” he said. “And certainly, again, it was a tough decision.”