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Chino Mine extends furloughs, postpones layoff decision

The main gate to the Chino Mine on April 11, the day Freeport-McMoRan told employees to stay home in response to a COVID-19 outbreak among workers in the mine’s truck maintenance shop. Management announced there is “a distinct possibility the mine and mill will close” due to lower copper prices, although that decision has now been delayed until later this year. (Geoffrey Plant/Silver City Daily Press)

SILVER CITY – In a letter to community leaders sent Friday, Freeport-McMoRan announced it is extending many Chino Mine workers’ furlough periods to “up to” six months.

After a mid-April COVID-19 outbreak in the Chino Mine truck maintenance shop, owner company Freeport-McMoRan furloughed most workers at the mine east of Silver City. The furloughs were originally expected to end this week. The company warned at the time of potential impending mass layoffs that could affect up to 825 workers.

“Chino employees have been notified their furlough period has been extended from approximately one month to up to six months, depending on an employee’s position,” Chino General Manager Chad Fretz and Tyrone Mine General Manager Erich Bower said in the Friday statement, which was provided to the Daily Press. “While on furlough, employees are considered to be on an unpaid leave of absence and will continue to be eligible for most company benefits.

In a separate statement to the Daily Press, Linda Hayes, Phoenix-based vice president of communications for Freeport-McMoRan, explained that by extending the furlough period, the company is not only delaying most layoffs “until a decision can be made,” but hoping to avoid some terminations altogether, while also offering employees the opportunity to take jobs at other Freeport-McMoRan operations.

“This also means Chino can make employment decisions based on the final plan, and any returning employees can avoid having to reapply for positions,” Hayes wrote in the statement. “In the meantime, furloughed employees can apply for any of the 130 internal positions now open across the company.”

Despite the delay, employees at Chino may soon find themselves without a mine at which to work if copper prices don’t improve.

“There is a distinct possibility the mine and mill will close, however, no decision has yet been made,” the letter from Fretz and Bower said. “The uncertain economic recovery, combined with still lower copper prices, is delaying our decision regarding Chino’s future until the third quarter.”

Hayes said that how long it takes New Mexico to lift its public health order could play into the decision whether or not to close the mine — and for how long.

“We continue to evaluate options regarding the future of the Chino Mine, including whether it will close and the length of any potential closure,” Hayes said. “We do not expect a decision until the third quarter, allowing the company time to monitor economic conditions as states and countries modify their COVID-19-related restrictions.”

The furlough extension came after a company survey of hourly workers in recent weeks, since Freeport-McMoRan leadership had made an earlier commitment to limit furloughs to a maximum of 30 days.

Despite the furloughs, layoffs remain on the table for at least some Chino employees.

“Depending on the extent of this possible closure, the result could be a total employment loss for an estimated 450 to 850 employees,” the statement from Fetz and Bower continued. “Based on the best information currently available, we anticipate that any potential releases from employment for our employees (both working and furloughed) would occur between Aug. 1 and Aug. 14, 2020.”

Fretz and Bower said that operations at the Tyrone copper mine, meanwhile, will continue for the foreseeable future.

“While the Tyrone operation has not seen significant changes to production, it continues efforts to cut costs to remain financially viable,” they said. “Unfortunately, these efforts have resulted in furloughs for a small number of employees.”

Asked why Tyrone might remain open while Chino faces possible closure, Hayes wrote that “each Freeport-McMoRan operation is distinct, with its own financial situation. A decision made at one site does not necessarily mean a similar decision would be made at other sites.”

Freeport-McMoRan indicated it will continue to hold virtual training and information webinars in conjunction with the New Mexico Department of Workforce Solutions to connect laid-off employees with federal programs, like the Trade Adjustment Assistance Program and the Workforce Innovation and Opportunity Act.

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