Suppliers News (August 23, 2006)

Genivar signs engineering deal to reopen Caribou

Blue Note Metals (BNT-V) has hired Montreal-based engineering firm Genivar to design, organize and build operations and facilities needed to reopen the Caribou lead-zinc-silver mines in New Brunswick’s famed Bathurst camp.

Genivar has worked on major projects at Barrick Gold‘s (ABX-T, ABX-N) Bulyanhulu gold mine in Tanzania, Agnico-Eagle Mines‘s (AEM-T) La Ronde gold mine and Falconbridge‘s (FAL-T) Raglan nickel mine, both in Quebec.

“We are fortunate to have an experienced firm like Genivar working with us on this project,” says Blue Note president John Martin. “We are confident that the facilities will be well engineered and constructed.”

The Caribou mines include the former Restigouche open pit, the Caribou underground mine, a concentrator and other infrastructure.

The package was recently acquired from CanZinco, a subsidiary of Breakwater Resources (BWR-T). Blue Note says it expects operations at Caribou to resume in spring 2007.

The work at Caribou will involve an overhaul of the existing concentrator to help operations run more smoothly, as well as the installation fine-grinding equipment and better process-control technology.

Blue Note says it will spend $38 million over the next 12 months reopening the mines. The company has a deal in place for any concentrates from production.

Genivar has more than 1,300 employees in 30 offices in Canada, Africa and South America.

Cat to build wheel-loader plant in China

Caterpillar (CAT-N) will build a 350,000-sq.-ft. wheel-loader manufacturing plant in Suzhou, China.

The move is an attempt to gain a greater presence in the world’s hottest construction and mining market.

The Peoria, Ill.-based heavy-equipment builder says construction on the plant is slated to begin in early 2007, but did not say when it will start building mid-sized wheel loaders there. Once built, most of the wheel loaders will be exported.

Caterpillar currently has 13 production plants in China, including joint ventures. Caterpillar began selling products in China in 1975 and opened a Beijing office in 1978.

Caterpillar hopes to reach sales of US$50 billion by 2010 and annual average earnings-per-share growth of 15% to 20% over the same period. The company believes ongoing growth in the Chinese economy should help it achieve those goals.

Caterpillar’s sales in the Asia-Pacific region rose 6% in the second quarter from the year-earlier period to US$1.23 billion. Caterpillar’s total sales increased 13% to $10.61 billion.

Earnings rose 38% to $1.05 billion, or $1.52 a share, from $760 million, or $1.08 a share, in the year-earlier period.

Kaiser Aluminum to supply jet maker

Under a multi-year agreement, California-based Kaiser Aluminum will supply Eclipse Aviation with fabricated aluminum for use in the production of the Eclipse 500 revolutionary very light jet.

Kaiser will be the jet maker’s primary provider of aluminum plate and sheet products beginning in 2007. There are 2,500 Eclipse 500 jets currently on order.

“Securing aluminum in a market in which there has been record levels of demand, constrained supply and price increases is a significant challenge,” says Eclipse Aviation president Vern Raburn. “This contract with Kaiser demonstrates that we are committed to securing our raw materials requirements, while managing raw material costs in anticipation of long-term production.”

Kaiser’s previously announced $105-million expansion of the Trentwood aluminum plant in Spokane, Wash., will provide the excess capacity needed to supply New Mexico-based Eclipse.

Eclipse builds aircraft for the general and commercial aviation markets. The company claims its “high-volume production system,” allows it to build the jets at one-third the cost of comparable small jet aircraft.

Kaiser Aluminum produces more than 500 million lbs. annually of value-added sheet, plate, extrusions, forgings, rod, bar and tube fabricated aluminum products for aerospace and other industries. The company has more than 2,000 employees and 11 plants in North America.