Jun 15, 2010 - QMAG, the Parkhurst and Kunwarara-based magnesite miner and magnesia processor, is back in full production and recruiting hard after turning its business around in spectacular fashion.
After European and North American sales collapsed in the global financial crisis, QMAG stopped mining at Kunwarara for most of last year and used stocks to keep its Parkhurst processing plant running at only 25% capacity.
The company ended its contract with a contract miner, cut all overtime, slashed discretionary expenditure and its employees agreed on a wages and salaries freeze to survive.
But managing director Alan Roughead says significant new product development and a move into new markets led its recovery.
"Our sales and production have been back at full capacity since March," said Mr Roughead, adding QMAG had been recruiting since last November.
The company has increased its workforce from 220 to 270 since then and will be hiring additional staff over the next three months as new production capacity comes on stream.
He said QMAG was aiming for a workforce in excess of 300.
A $42 million expansion project, which is almost complete and will be commissioned between July and September, will increase production capacity by 50%.
And the company is looking forward to starting mining at Yaamba a new deposit of higher quality which will allow it to make new products and increase sales still further.
"Thanks to the support of our employees, our shareholder (the private equity investor Resource Capital Funds), which injected considerable funds into the business, and our bank, we survived the worst of the downturn without the need to implement any redundancies," he said.
There has also been a gradual economic recovery in the key traditional markets in Europe and North America but he says it is likely to be another six to 12 months before the company returns to profitability.
And there are a number of difficult operating conditions and uncertainties to be faced, including the fragility of the economies of Europe and North America.
He said the Federal Government initiatives on emissions trading and Resource Super Profits Tax had created a lot of uncertainty and potential costs.
Magnesia prices have started to recover but are still depressed while there have been increased costs for fuel, freight, power and state royalties to contend with.
