2ndUPDATE: Xstrata To Shut Kidd Smelter, Refinery Temporarily
August 27 2009 - 10:27AM
Dow Jones News
Xstrata PLC (XTA.LN) said Thursday it will close its Kidd Creek
copper smelter and refinery temporarily due to a shortage of
third-party concentrate, exacerbated by a strike at Vale Inco in
Canada.
The smelter and refinery, located in Timmins, Ontario, will shut
Sept. 7 and remain closed for seven to 10 weeks, the company said.
The mine remains open.
Kidd produces 145,000 metric tons of copper cathode a year, it
said on its Web site.
"In addition to reduced shipments from some of Kidd's regular
suppliers, concentrate availability is being compounded by the
current Vale Inco strike in Sudbury," said Thompson Hickey, general
manager at the Kidd Metallurgical Site.
Xstrata receives about 20% of its concentrate needs from Vale,
the company told Dow Jones Newswires. The rest comes from other
third-party suppliers and 40% from its own mines.
Unionized workers at Brazilian miner Vale SA's (VALE) mine
complex in Sudbury, Ontario downed tools July 13 and those at its
Voisey Bay complex in Newfoundland-Labrador followed suit two weeks
later.
Sudbury had already been shut since May for care and maintenance
and then again between June 1 and July 27 due to low nickel prices.
They were scheduled to reopen at the end of July but the strike
delayed that.
Vale Inco's third Canadian nickel unit at Thompson, Manitoba, is
currently on a scheduled maintenance outage and will resume
operations in September.
Sudbury produced 85,300 tons of nickel in 2008, Voisey Bay
produced 77,500 tons. Sudbury produced 115,300 tons of
copper-in-concentrate in 2008, Voisey Bay produced 55,400 tons.
Xstrata said some employees will be laid off temporarily as a
result of the closure, but the numbers and duration haven't been
finalized.
The Kidd Creek smelter was previously shut for eight weeks
beginning mid-April due to a decline in demand for sulphuric acid,
which the plant produces as a by-product of smelting
concentrate.
"The plant has been struggling economically for a number of
years," said Xstrata spokesman Louis-Philippe Gariepy, citing the
increased cost in freight to ship material.
"We were already in a restrained situation due to a slowdown in
copper feed," he said, adding that the smelter and refinery were
running at a reduced rate.
Xstrata will stockpile mined material that normally goes to the
Kidd smelter and some will be sent to its Horne smelter in Quebec.
The Kidd Metallurgical Site is comprised of a concentrator, a zinc
plant, and a copper refinery and smelter. There are a total of 800
people at the site.
Vale said this week that it will begin training its 1,200
non-unionized staff to restart some operations, focusing first on
copper and platinum group ore bodies.
-By Devon Maylie, Dow Jones Newswires; +44 (0)20 7842 9483;
devon.maylie@dowjones.com