Kitimat smelter’s fate rests on global decisions

The decision to construct a copper smelter at Kitimat on the British Columbia coast is now delicately balanced — the result of several key decisions made recently by the copper industry around the world.

First, giant RTZ Corp., the world’s biggest mining company, said it will press ahead with its $1-billion copper smelter at its Bingham Canyon complex near Salt Lake City, Utah.

“This will reduce the amount of copper concentrate that has to be treated on the world market,” said Highland Valley Copper president Poul Hansen. Bingham currently exports 40% of its concentrate — mainly to Japan — and without the new smelter it would have had to send half its concentrates elsewhere for smelting as a result of a planned 25% increase in concentrate production.

Hansen said there is roughly an overall world balance at the moment between smelting capacity and concentrate that needs smelting. Two other decisions on new smelters,

both by Mitsubishi, will have little impact on the smelter/ concentrate balance. Mitsubishi Material Corp. has just cancelled its proposed 182,000-tonne-a-year copper smelter at Texas City, Tex., after a bitter four-year battle with U.S. authorities and environmentalists. This will be offset by Mitsubishi’s partnership in a copper smelter under construction in Thailand to process copper concentrate from mines worldwide. The big unknown, however, is the aggressive expansion of the Freeport McMoran copper mine in Indonesia.

Hansen said the Indonesian mine is exporting worldwide, including to the U.S. and Australia, which could produce a surplus of concentrate and tip the scales in favor of a new B.C. copper smelter. But Cominco Ltd. president and chief executive officer Bob Hallbauer said it is extremely difficult to predict accurately the need for new smelting capacity and bring it on stream at the required time. He cautioned that a dozen new copper smelters or expansion of existing smelters are on drawing boards around the world. Production from B.C.’s copper mines is generally tied under long-term contracts with off-shore companies, including Mitsubishi and Sumitomo. — The Vancouver Sun