Mazarin sticks by asbestos but also looks to diversify

With its dispute over mine profits now settled and asbestos fibres standing tall in Asian markets, Mazarin Mining (TSE) is now free to try its hand at other minerals.

It was Canadian Geological Survey founder Sir William Logan who, in 1848, first described the presence of the asbestos-bearing mineral chrysotile in the ultramafic ophiolite rocks of Quebec’s Eastern Townships. Production began in 1862, and by the 1950s there were between 10 and 15 mines operating in Quebec.

Mazarin came on the scene in 1992, when it acquired 54.6% of the voting shares of Asbestos Corp. Ltd. (ACL) and all of the shares of Bell Asbestos Mines (Bell). ACL and Bell each own 22.5% of the shares of LAB Chrysotile, the firm that operates the four asbestos mines and three mills in the Thetford Mines area, which The Northern Miner recently toured.

LAB packs up and ships out roughly 310,000 tonnes of asbestos fibres per year, accounting for more than three-fifths of Canadian production. In terms of output, Canada is second only to Russia.

Ore sent to LAB’s mills is first broken by a primary crusher, and then further by cone crushers. The ore is generally moist, so it must be tumbled in huge dryers before the asbestos fibres can be separated from the rock. Once dried, the fibres are separated in gyratory crushers. Ore fragments are poured onto vibrating screens, which cause the fibres to rise above the rock, to be drawn up into a cyclone collector. Fibres of like size and “openness” (that is, the degree to which the fibres have broken down) are sorted and packaged in 50-kg bags for shipping to customers.

The number of fibres per cubic centimetre in the air at LAB’s mills is strictly monitored and kept at a fraction of the maximum permitted by the federal government. Such restrictions are the legacy of the “asbestosis” scare of the 1970s and 1980s, when it was discovered that asbestos fibres that were inhaled could damage the lungs, causing lung cancer and other respiratory diseases. (It has since been learned that asbestos substitutes such as fibreglass and polyvinyl chloride are potential health hazards.) By the late 1980s, demand for asbestos in North America and Europe had plummeted to near zero, and most asbestos mines were shut down. But in recent years, scientific studies have increasingly shown that the danger of using products made from asbestos (in particular, the chrysotile-derived form mined in Quebec) is minimal. Asbestos is now known to be dangerous only when fibres are permitted to float freely in the ambient air, such as when walls or pipes containing asbestos are demolished, and not when locked into unbroken cement.

Bans on many uses of asbestos in the U.S. have been lifted, although in the minds of many Westerners, the soft white fibres will continue to be equated with death and disease.

This is not the case in Asia, however, where the need for strong, fire-retardant building materials, as well as friction materials such as brake pads, is growing steadily. The global asbestos market may have stabilized since the 1980s, but in Asia, where LAB Chrysotile exports most of its products, these are boom times.

Indeed, sales to Asian markets enabled LAB Chyrsotile to turn a healthy $27-million profit in 1994. Through its subsidiaries, ACL and Bell, Mazarin currently receives 32% of LAB’s income, although that percentage rises and falls with LAB’s profitability.

It had been impossible, however, for Mazarin to spend any of its share up to July 1995, as it was embroiled in a dispute over profits with LAB’s majority owner, Jean Dupere, and his associates. The litigation was eventually settled out of court, and a retroactive income distribution scheme set up.

Now that Mazarin is receiving its share of LAB’s income, “it can use this money to diversify the company,” says Jacques Bonneau, president of Mazarin.

He points out that Mazarin will be seeking advanced gold and copper projects, primarily in North America but globally as well. The company already has acquired a 30% interest in the Wilco gold property near Rouyn-Noranda, Que., where reserves are estimated at 103,100 tonnes grading 6.82 grams gold per tonne, and a 25% share of gold-copper properties 25 km west of Rouyn-Noranda, where 125,000 tonnes averaging 4.6 grams gold and 1.6% copper are outlined. It also holds interests in several other properties in the province.

Despite Mazarin’s ambition to diversify, Bonneau insists that, “for this company, asbestos is very important. We believe in it, and we are ready to ensure that all these operations stay alive.”

LAB Chrysotile estimates it has 13 years of reserves left at Thetford Mines, although, as Bonneau points out, that number has remained relatively constant for 125 years. “In 50 years, all these mines will still be here,” he says confidently.

Of LAB Chrysotile’s 1,600 employees, 1,200 are now working, while the remaining 400 have been laid off. This is due to the fact that LAB’s operations are shut down, in accordance with a scheduled rotation, for 44 weeks per year.

“If the market is really booming, we can increase production very easily,” explains Bonneau, who adds that workers may also be asked back into LAB’s pits and mills if the current drill program adds to reserves. “We should know the results in the next two or three months.”