Teck Cominco talks at Trail reopen

Talks between diversified metals miner Teck Cominco (TEK-T) and workers at its zinc-lead smelter and refinery in Trail, B.C. are back on track after nearly 11 weeks of stalled operations.

The company says negotiations are scheduled to resume on Friday and will continue throughout the weekend. Talks came to a halt over a disagreement in wages and pension benefits on July 14; over 1,200 production, maintenance, office and technical workers walked off the job a few days later.

Greg Waller, director of finance analysis and investor relations, says the company is eager to see a mediated settlement. In July, the company declared force majeure on all metal and chemical product sales and the company’s stored inventories are now long gone.

“When the plant closed due to the strike in late July, we had about a month’s worth of inventory in the pipeline,” he said. “We aren’t supplying customers right now and it’ll take some time for us to refill the pipeline once we restart operations and recommence deliveries to customers.”

The Trail operation accounts for about 10% of the company’s operating profit, but some of the cost of the strike has been mitigated by the sale of power from Teck Cominco’s Waneta hydroelectric dam.

The Trail workers’ last 4-year contract expired on May 30.

“We’re hopeful that we can reach a settlement as a result of these discussions coming up,” says Waller.

Investors haven’t paid much heed to the strike given the record $225 million in profits the miner earned in the second quarter of 2005 – up from $116 million a year earlier and reaped from soaring base metals prices. The company received an added boost to its stock when it announced plans to acquire a 15% interest in the Fort Hills Energy Limited Partnership, an Alberta oil sands project with UTS Energy (UTS-T) and Petro Canada in early September.
Today, Teck Cominco was trading around $53.15, short of an all-time high of $53.25.