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The Tasiast mine is an open pit operation in northwestern Mauritania.Handout

Kinross Gold Corp., dogged by protests and controversy after dismissing nearly 300 workers at its Mauritania gold mine, insists that the layoffs will help safeguard its future at one of its highest-cost operations.

The Toronto-based company, one of the world's 10 biggest gold producers, is in a serious cost-cutting drive after writing down much of its $7.1-billion cost of acquiring Red Back Mining, owners of the Tasiast gold mine in Mauritania.

But after announcing the layoffs at its mining operation in the West African country last month, Kinross has faced lengthy and bitter protests by the laid-off workers and their supporters. The protests have continued for weeks, triggering a heavy-handed police crackdown.

About a dozen protesters were arrested and a similar number were injured when the police raided the protest last week, according to local reports.

Kinross will not comment on the police raid, but it has defended the layoffs, calling them a "difficult but necessary response" to ensure the future of the mine.

"Tasiast is one of the highest-cost mines in our portfolio and we have had to make some difficult decisions in response to the recent decline in the gold price," said Steve Mitchell, the company's vice-president of corporate communications.

Canadian activists say the layoffs in Mauritania are an example of the reasons for skepticism about the federal government's strategy of using Canadian mining companies as a tool for economic development in Africa and other developing regions.

The Harper government is spending $15.3-million over the next five years on an African Mineral Development Centre to help create jobs and reduce poverty in Africa. The centre was launched last month in Mozambique with Canada as the founding donor. The government is also funnelling millions of dollars in foreign aid money to Canadian mining companies in Africa and Latin America to help them in local community development.

But critics such as MiningWatch, an Ottawa-based advocacy group, argue that the Mauritania layoffs and the police crackdown on the protesters are examples of how the mining industry is the wrong tool to use in African development. They say the industry is too dependent on volatile mineral prices and the boom-and-bust market cycle, and too likely to trigger social conflict and violent repression in poor countries.

Catherine Coumans, a researcher at MiningWatch, said the federal money for the mining industry in Africa is effectively "subsidizing the industry's public relations exercise."

Union leaders and other activists in Mauritania have alleged that the layoffs at Tasiast were not legally conducted and were unfair to the workers, including one worker who was still getting medical treatment for an industrial injury when he was dismissed.

The sacked workers and other protesters had been conducting a sit-in on the street outside the presidential palace in Mauritania's capital, Nouakchott, when the police tried to disperse them, saying that the streets had to be cleared because the president of Mali would be paying an official visit to the palace.

Anita Hunt, an activist and researcher who spoke to Mauritanians at the protests, said the police raid last Thursday night was "a sudden violent attack, using batons and tear gas."

Mr. Mitchell said the layoffs were fully legal and were announced after many consultations with union leaders and government officials. None of the laid-off workers were on medical leave, although one had been placed on "light duties" when he was dismissed, Mr. Mitchell said.

He said the company still employs nearly 1,500 people in Mauritania, of whom 86 per cent are Mauritanian nationals, along with more than 2,000 Mauritanians who are employed by the company's contractors. The company has spent $25-million on job training and apprenticeships in Mauritania over the past three years, he said.

Follow Geoffrey York on Twitter: @geoffreyyorkOpens in a new window

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