Stillwater Mining Co. announced plans to lay off 119 workers at its Nye mine and Columbus smelter — about 7 percent of its total workforce — because of falling metals prices.

In a separate move, starting Sept. 1, company officials said they would start paying 900 union members at the Nye mine and Columbus smelter under the terms of a contract the miners had rejected twice before, The Billings Gazette reported.

This move appears to head off a work stoppage, for now, at Montana’s largest mining company. However, officials with the United Steelworkers have filed a federal unfair labor practices complaint against Stillwater in an attempt to overturn the contract.

Scott McGinniss, president of the United Steelworkers local 11-0001, said 100 union jobs will be cut, and the remainder are salaried positions, he said.

Veteran union workers will have the chance to “bump” less experienced workers, McGinniss added.

“I’m sure the labor dispute had something to do with it, but, to be honest, the metals prices (were the biggest reason). They were going to lay us off anyway,” McGinniss said.

Company officials said they will focus on the most profitable areas of the East Boulder mine. Prices for platinum and palladium metals produced at Stillwater have fallen about 10 percent over the past year, largely because of saturation in the worldwide market and declining Asian demand.
Stillwater has about 1,600 employees nationwide, with the majority in the Beartooth valley in south-central Montana. The company has already cut its workforce by 9 percent over the past year through a combination of attrition and layoffs.

This most recent layoff announcement comes in the middle of a prolonged contract dispute with the Steelworkers that began in April. Workers at the Nye and Columbus facilities have twice rejected a company contract offer that had been agreed upon by negotiators on both sides.

Stillwater officials called the offer their “last, best and final” after the second contract rejection July 27, adding that it included no pay increase and changed the structure of incentives.

McGinniss said that that contract offer hit rock breakers, the workers who produce the ore, the hardest. Their incentives are changing, so they likely will make less for mining the same amount of ore under the current expired contract, he said.

This is in part because incentives are based on factors outside the rock breakers’ control, such as the cost per ounce of mining ore, McGinniss said.

On July 30, Stillwater CEO Mick McMullen told the union that the two sides had reached an impasse. The previous contract had expired June 12, but employees have continued coming to work.

The Steelworkers filed a complaint with the National Labor Relations Board last week. McGinniss said he expects it will take months or more than a year to resolve.

The layoffs were first discussed during a July 31 conference call with investors. McMullen said the company needed to cut up to $15 million from its annual budget to remain competitive.

Stillwater is the nation’s only producer of platinum and palladium.