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