BY KEITH LACEY
Inco Ltd. confirmed Friday it will close its copper refinery by the end of the year. There will be no layoffs as a result of this announcement. Refinery workers will be transferred to other Sudbury operations.
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A reduction in costs of more than 50 percent will help ensure a long-term future for Inco?s mining and processing operations, the company says. |
The decision did not come easy, but it is final, said Mark Cutifani, Inco?s president of Ontario operations at a news conference Friday.
?Like many tough decisions, this is the right decision. It gives our business a stronger, more competitive future in Sudbury and that it is in the best long-term interest not only of our company, but also our employees, the community, and future generations who will work at Inco and be part of the community.?
The uncertainty surrounding the refinery?s future has caused anxiety for the 140 unionized employees and the community as well. Inco wanted to go
public with its final decision sooner rather than later, said Cutifani.
The refinery will ?ramp down operations? until the end of 2005 and all remaining refinery employees will be offered jobs elsewhere, he said.
Cutifani would not divulge the company, but said a deal is signed with a Canadian company to refine Inco?s copper in the future.
Sources say that company is Noranda Inc., which will refine the copper at a large plant outside Montreal.
There are many reasons for closing the copper refinery, said Cutifani.
?The plant is old, the plant is small and the technology is outdated,? he said.
?Our cost to refine a pound of copper is more than triple that of our competitors, whose refineries are two or three times bigger, and the cost of investing in a new refinery in Sudbury can?t be justified for such a small component of our business.?
Sudbury operations produce copper that is 98 percent pure, but the final step to produce 100 percent copper represents just three percent of the Sudbury business. Copper sales represent only eight percent of total revenues, said Cutifani.
A reduction in costs of more than 50 percent in this area of operations will help ensure a long-term future for Inco?s mining and processing operations, he said.
?While this step alone does not guarantee a future, it is a critical component of our long-term strategy to be competitive in all areas of our business,? he said.
Continuing to operate a non-competitive asset threatens potential job losses in more core areas of the Sudbury operation, with some 300 to 500 jobs at risk if current cost structures in copper production aren?t improved, he said.
?Today?s decision is all about creating a long-term, profitable future for Inco in Sudbury,? he said.
Inco?s future in Sudbury can only be secured through attracting enough investment to open new mines to allow the company to continue to be a leading provider of nickel on the world market, he said.
The company has invested $550 million in capital costs at Sudbury operations over the past two years to ensure that long-term future, he said.
This includes $183 million at Garson Mine, Creighton Mine and Coleman Mine ensuring 600 long-term jobs, he said.
The company has hired more than 140 new employees in 2005, almost all unionized positions, he said.
