Lowered demand in China forces job cuts at local chromite refinery

Thirty-one employees were laid off in September when Oregon Resources Corporation  was unable to export chromite and was forced to reduce expenditures.

By Sebastian Bartlett | Webmaster

Many local community members are facing unemployment after Oregon Resources Corporation (ORC) laid off 31 employees last month, another blow to Coos County, which has the ninth highest unemployment rate in the state at 10.8 percent.

Recently, production of industrial minerals such as chromite has suffered. Rapid expansion in countries leads to a higher demand for minerals like chromite. In 2011, China was absorbing 80 percent of the global chromite supply. ORC’s Director of Marketing and Sales Brianna Hanson said the downturn in industrial mineral production is due in part to an economic soft landing in China.

“The soft landing in China has brought its growth down to around seven to eight percent,” Hanson said. “It’s still growing, but at a much slower pace.”

Due to the slowed growth in China and other factors, including a global recession, the need for the chromite has decreased, causing companies such as ORC to struggle to maintain their previous rates of production.

On Sept. 6, ORC laid off 17 temporary employees and 14 full time employees. According to Human Resources Administrator D’ Ann McDaniel, the job losses were across the board, including administrators and plant workers. The announcement was unexpected.

“There wasn’t a lot of warning for the employees before the layoffs,” McDaniel said.

Plant operation was also cut from seven to four days a week, while still operating 24 hours a day. The plant went from four crews to two crews and had to borrow $5 million in the form of a promissory note, according to Hanson, in order to continue operation. Hanson said the cuts in production were due to a drop in sales.

“We had to match our production to our sales,” Hanson said.

Holden Mitts, a former student of Marshfield High School, was one of the workers who lost his job. Holden is brother to Lane Mitts, a current junior at Marshfield.

“They went from four shifts to two, and I was one of the workers cut,” Mitts said. “I wasn’t expecting to lose my job.”

According to the United States Geological Society (USGS), chromite holds several uses in heavy industry. It is used to produce stainless steel and is used in molds and in foundries for molten metal, due to its high heat resistance. The auto industry also uses a lot of chromite to produce parts. ORC produces the grade of chromite used as a refractory material in foundries.

As the only chromite producer in the United States, ORC has to compete in a global market with countries such as South Africa, India and Kazakhstan. In 2011, South Africa’s chromite supplies accounted for 47 percent of world trade.

McDaniel also believes ORC’s employees learn several skillsets that can be used in other lines of work.

“Skills the workers learned here would be useful working for companies like GP,” McDaniel said. “The skills learned here are also useful in positions such as welders and maintenance jobs.”

McDaniel said if there is an increase in sales, there is an opportunity for those workers laid off to get their jobs back. If ORC requires additional workers and begins hiring, the employees who lost their jobs will be the first hired back.

“If there is a major improvement and we begin hiring again, previous employees will be the first pick,” McDaniel said. “They possess the skillsets and have the experience and training to work in the plant.”