Rumours About Possible Mining Shutdown Circulating in Sudbury – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of Mining.com permission to post Bill Bradley’s article. www.northernlife.ca

Rumours have been circulating in the city about the possible shutdown of major mining operations in the city.

At the present time, Northern Life has been unable to substantiate any shutdown by Vale Inco or Xstrata.

One rumour has it that Vale Inco will make an announcement next week about a four month shutdown starting March 1, 2009. The action would be for infrastructure improvements and repairs to key parts of the operation.

Angie Robson, manager of external relations for Vale Inco, said Friday the rumour has no basis in fact and is idle speculation.

“Our company has a policy that we do not comment on rumour or speculation,” said Robson.

John Fera, Local 6500 Steelworkers president, disputes the rumours, saying his sources told him Thursday night no shutdown was forthcoming at Vale Inco. He confirmed that for Northern Life Friday morning, after calling his source.
 
“The company, I understand, is looking at the situation quarter by quarter. The end of the first quarter of this year will be important to watch though,” said Fera.

“Shutting down an operation this size in the winter is risky. The last time they tried it cost them a lot of money,” he said.

Fera said the rumours may be about Xstrata, as they are having more trouble than his company.

Rick Grylls, president of Local 598 Mine Mill and Smelter Workers, said he could not comment on the situation with his union.

“I have a meeting with the company today, but so far I have heard nothing about any shutdown at Xstrata,” said Grylls.

He did say though Xstrata is struggling at the moment due to low nickel prices, the future looks bright.

“The problem the company faces is that they are involved with lower grade and volume production at their older mines. Once they get their new mines underway, Nickel Rim and Fraser Morgan, they can still be profitable at lower prices of nickel, in the range of $4 to $5 a pound,” he said.

Grylls said the Nickel Rim Mine will be one of the richest mines in the world with a life of 12 to 15 years.

“Xstrata has the money to complete these two mines and to do work on the smelter. They have a good plan for the future.”

He did admit that the market for stainless steel, a major user of nickel, is bleak at the moment, but could reverse once municipal infrastructure projects get underway in North America and abroad.

“New bridges require nickel. U.S. President-elect Obama has been saying rebuilding his country’s infrastructure is his top priority. China also has been spending on infrastructure.”

Grylls admitted some of his members had heard the rumours about Vale Inco.

“I have heard the rumours. Sometimes a company will put out the rumours first in order to soften the blow to the community so the shock is less,” he said.

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