A small coastal community in Western Australia’s Midwest is bracing for economic shock, as a mine closure is set to cost more than 100 jobs.
Mineral Resources (MinRes) has confirmed it will close its Lucky Bay garnet project near Kalbarri, about 600 kilometres north of Perth, from next week.
Garnet is a hard mineral primarily used as an industrial abrasive.
Citing increased diesel costs and the ongoing conflict in the Middle East, MinRes said a “strategic review” had found it was in its best interests to put the mine into care and maintenance from July 1.
The Chris Ellison-led company was the biggest single employer in the Kalbarri community, alongside another nearby garnet operation.
Lucky Bay is south of Kalbarri in WA’s Midwest region. (ABC Midwest Wheatbelt: Samille Mitchell)
Shire of Northampton chief executive Andrew Campbell said the sudden shuttering would be a significant blow to retail and hospitality businesses, particularly if the job losses forced people to leave town.
“It is very significant, 110 jobs. Whilst not all employees lived in the district, the majority would, and Kalbarri will be severely impacted by this closure,” he said.
“It will have an immediate effect on the individuals, but those employees would have families as well, so it is likely to have a very significant short-term impact.
“The flow-on effects of that in terms of the retail and commercial sector are likely to be quite huge.
“I think once [the Kalbarri community] overcomes the shock, it will be a pretty sombre mood.”
Kalbarri is a tourist hot spot, but has a population of about 3,500 and limited job opportunities. (ABC Midwest and Wheatbelt: Samille Mitchell)
In a statement to the ASX, MinRes said it would offer redeployment opportunities to employees impacted by the closure.
“The mine’s financial performance has been materially impacted by ongoing conflict in the Middle East, a region representing a significant proportion of Lucky Bay’s sales,” the statement said.
“MinRes will assess all options for Lucky Bay’s future, including a potential divestment.”
The company said it would declare a $40 million loss in its upcoming accounts.
The closure comes less than a year after Mineral Resources acquired the Lucky Bay garnet operation from the administrators of Resource Development Group.
“There was some degree of hope that Mineral Resources could get the operation going again,” Mr Campbell said.
“But that doesn’t seem to be the case.”
