South Australian lead and zinc producer Nyrstar will aim to keep all its existing employees despite reports of 100 job losses, Mining Minister Dan van Holst Pellekaan says.
The Australian Workers' Union says 40 full-time and 60 contract workers will be made redundant at Nyrstar's Port Pirie smelter but Mr van Holst Pellekaan says the company has told him otherwise.
"They have a mix of employees and contractors and they've made it very clear to me that their ambition is actually not to lose any of their ongoing employees," the minister said on Wednesday.
The state government underwrote $291 million of a $660 million recent site redevelopment at Port Pirie in order to keep jobs in the city.
In May, Treasurer Rob Lucas said the company would defer payments to its international financiers by 18 months until November 2019.
AWU South Australia branch secretary Peter Lamps said the union was made aware of the potential cuts through media reports, which could place the company in breach of the workers' agreement.
"The union is considering all options including a visit to the Fair Work Commission," he said.
"Unlike previous redundancy programs on site where there was a demonstration of transparency, that transparency has turned to opaqueness."
He said the union has made a number of attempts to contact Nyrstar, but the company has not been able to clarify its position.
Opposition mining and employment spokesman Tom Koutsantonis, who was involved in the initial deal, said some job losses were expected after the redevelopment.
"What we got told is there would be a massive flex up of employment while construction was underway and that's normal," he said.
"Once you transition to the operation of the plant there would be some efficiencies, but not on the scale we're hearing now."
But the union argued most construction-related redundancies had already been processed.
Nyrstar, a Belgian company, employs about 700 workers at its Port Pirie smelter.
Mr van Holst Pellekaan criticised the previous government for not including a jobs guarantee in its negotiations with the company.
"The prospect of any job losses is certainly concerning," he said.
"What's very concerning also, of course, is the fact that we needn't be in this situation."