Job losses likely at remote island mine as costs nearly double due to flooding

In short:

South 32 is likely to make redundancies at its manganese mine on Groote Eylandt in the Northern Territory.

The company is looking to cut $129 million from the business and spend about $100 million on new water infrastructure.

What's next?

The company says it will make changes to strengthen its long-term viability.

Job losses are likely at South 32's manganese mine on Groote Eylandt in the Northern Territory as the operation battles years of flooding impacts and skyrocketing production costs.

The Groote Eylandt Mining Company (GEMCO) mine has begun consultations with staff.

The ABC understands it needs to cut $129 million from the business in response to costs increasing by more than 80 per cent in recent years.

The island and mine site were hit hard by Tropical Cyclone Megan in March 2024, but it is understood multiple wet seasons and persistent seepage of groundwater into the pits are also responsible.

GEMCO is planning to spend about $100 million on new water infrastructure in the next two years if it receives regulatory approvals.

A South32 spokesperson said in a statement the company would make changes to strengthen its long-term viability and was speaking to workers.

"GEMCO has completed an internal review in response to a more challenging operating environment and increased cost pressures, and has begun implementing changes designed to strengthen the long-term sustainability of the business," the spokesperson said.

"The review forms part of a program focused on improving structures, systems and processes and ensuring GEMCO is well positioned to operate successfully into the future. As part of this work, GEMCO has reviewed its workforce requirements and commenced consultation with employees and contractors who will potentially be impacted.

" This is not something we take lightly and our priority is to support affected employees through the process, including exploring redeployment opportunities where possible. "

Unions watching closely

Officials from two separate unions representing workers at GEMCO told the ABC they believed office staff would likely be the target of redundancies.

A spokesperson for the NT branch of the Construction, Forestry and Maritime Employees Union said it was closely monitoring the situation to see if blue-collar workers were affected.

Union officials were told South 32 management would provide staff with more information about the redundancies by the end of the week.

According to GEMCO's enterprise bargaining agreement, the company must consult with workers before making any significant organisational changes.

The bargaining agreement is due to expire at the end of 2027.

The island's wharf was destroyed in 2024 when Tropical Cyclone Megan pushed a loaded bulk carrier into the structure during high tides.

Heavy rainfall damaged the mine's pits, a critical bridge and several roads.

Exports from the island did not restart until 2025.

Mining is expected to conclude on the island within the next 10 years, according to the local Aboriginal land council.