New York, N.Y.-based
The charge is intended to cover the costs associated with suspending its El Paso copper smelter in Texas, taking a writedown on the Black Cloud lead-zinc mine in Colorado, and increasing its cash reserves for environmental remediation.
The integrated producer says a shortage of copper concentrates has forced it to suspend operations at El Paso, which employs 450 people, for three years. About 50 employees will maintain the smelter during the suspension so that operations can resume when the concentrate market improves.
The shutdown at El Paso will affect the company’s Amarillo copper refinery in Texas, which refined almost 1 billion lbs. of copper in 1997. Amarillo will run at only two-thirds of its normal capacity in 1999.
The news is no better at the company’s Black Cloud mine in Leadville, Colo. An ongoing drill program at the mine has failed to find significant reserves and, as a result, Asarco will take a writedown on the book value of the mine and provide for the costs of mine suspension and remediation.
The fourth-quarter after-tax charge will also add to the cash reserves needed for remediation at several of Asarco’s historic plant sites, as well as severance and other cost-reducing measures.
Asarco’s third-quarter loss was mainly the result of lower metal prices. The price of copper, the company’s main product, averaged 74 cents per lb. on the London Metal Exchange, compared with US$1.03 per lb. in the same period a year earlier, when Asarco reported earnings of US$45.8 million (or $1.09 per share).
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