The Restructuring of Ranger - A Case Study or Necessity is the Mother of Invention

In 1991 the uranium spot market price dropped to approximately US$7/Ib U308, a historical low in real terms and the short-term outlook for the industry in the next five years was grim. At this time the Ranger operation was producing uranium concentrate at its design capacity of approximately 3 000 tonnes/year. The loss of two major long-term contracts owing to price and reduced power utility demand due to excess inventories meant that the company could not match production to sales. Continuance at this production level would have resulted in a rapid buildup of product inventory and the tie-up of significant cash reserves. After analysing various options, an innovative operating strategy was devised such that production and sales were approximately balanced without a significant impact on the unit production cost or a long term effect on the plant or operation. A campaign mining/milling operation commenced and approximately 40 per cent of the workforce were retrenched. Multi-skilling of all employees was a critical aspect of ensuring a successful outcome. This paper examines the strategy and reports on the success of the operation two years after the restructuring exercise was effected in November 1991.