First Nickel locks gates to Sudbury mine

When workers at the Lockerby mine in Sudbury, Ontario arrived on shift at 5 a.m. on Thursday, they found the gates locked and the copper-nickel mine idle.

The company, First Nickel (TSX:FNI) has immediately issued layoff notices to 35 employees, following through on an announcement in June that it would close the mine once ore supplies dried up. That however was not supposed to happen until the fall, so the layoffs took the employees by surprise.

"I will be talking to the legal department to see if we have any kind of legal action we can take on behalf of our members," Anne-Marie MacInnis, president of Mine Mill Local 598-Unifor, told the Sudbury Star. She said the workers may be eligible for a a federally-funded severance program up to $3,800, but in doing so, they would also relinquish recall rights.

An announcement on First Nickel's website says it has gone into receivership.

In June the Toronto-based company said that while it was planning further development at the mine, weak nickel prices and low production levels at Lockerby made them re-think the decision.

The miner, which acquired Lockerby in 2005, had halted operations in 2008 also due low commodity prices, but it restarted it in September 2011. According to regulatory documents, the firm had 165 employees plus contractors at the end of last year and reduced that by 30% in January.

The Lockerby property formerly belonged to Falconbridge, a Canadian mining giant that is now part of commodities traders and mining giant Glencore (LON:GLEN).