Falco extends Kidd grounding

With the zinc market showing no signs of recovery, Falconbridge (FL-T) is extending by a month the previously planned 9-week shutdown of refining operations at its Kidd metallurgical site in Timmins, Ont.

The closure, which will now run from June 29 until Sept. 30, is designed to reduce an inventory glut of the bluish-white metal.

Daniel Picard, general manager of the Kidd division, says the decision is based on the persistence of low revenue from treatment charges, changes in currency exchange rates, higher energy costs, and low metal prices.

The intends to supply customer sales commitments during the closure. However, zinc production in 2003 is expected to slip by 35,000 tonnes to an estimated 110,00 tonnes.

During the shutdown, Falconbridge will re-assign some of the refinery workers to vacation relief at the operation’s concentrator and copper smelter. The Kidd operation has 295 employees.

“We will also perform maintenance work in both the smelter and zinc operations, and employees will take their vacation during the shutdown,” adds Picard. “However despite this, there will be some temporary layoffs.”

During the first three months of 2003, the Kidd Creek division suffered an operating loss of $21 million, as cash costs jumped 73% to US97 per lb. copper, net of zinc credits.

The division incurred an operating loss of $78 million in 2002, despite increased mine production and record volumes of refined copper and zinc. Cash costs averaged US62 per lb.