A FALCO VETERAN AT THE HELM

Not long ago Frank Pickard, the new president of Falconbridge, calculated the odds were slim that he could land the presidency at the base metal mining company. The owners, Noranda Inc. and Trelleborg of Sweden, who had acquired the company in late 1989, hand-picked the top executives. Alex Balogh was given the mantle soon after the Noranda-Trelleborg purchase. Pickard figured, as a veteran Falconbridge man (not a Noranda insider) that he was a dark horse. So he considered an early leave-taking.

The retirement plans were abruptly and happily put on hold with his official appointment as head of Falconbridge in January, 1991. Pickard had been wrong once before about the future course of his career. Back in 1957, as a Queen’s University graduate with a Bachelor of Arts in chemistry and mathematics, he had decided that mining was not for him. The Sudbury native was bucking family tradition. Both mining people, his father had been an Inco employee, and his grandfather, coincidentally, had been a diamond driller probing the original Falconbridge orebody back in 1916 for Longyear, the company that eventually sold the claims to Falconbridge. But Pickard hesitated until, a few months into a job as an experimental engineer and relief shift boss at the Falconbridge mill, he began to “see a future in it.”

After nearly 3 1/2 decades with the nation’s No. 2 nickel miner, Pickard has an intimate knowledge of the Sudbury works. He is a walking encyclopedia of Falconbridge. Almost entirely from memory he can recite the names and dates of the scores of mine and mill startups and closings and the evolution of technology and processes, both underground and in the mills of Falconbridge.

Pickard puts that memory to good use. A newcomer, for example, might logically question the trucking of slurried concentrate from the Strathcona mill, at the northwest end of the Sudbury Basin, the 30 km or so to the smelter at the southeastern extremity. Pickard’s reply? “We studied it a couple of times. When we built the Strathcona concentrator in 1967, we had a unique way of handling material as a slurry in specially designed rail cars. A study showed we could pump the material at less cost to the Falconbridge smelter by pipeline. That’s when CP Rail, lowered its rates. So slurried transportation was suddenly not competitive with rail haulage.” It was again studied in the early 1980s and again CP Rail sharpened its pencil. A few years later CP scrapped much of its short-haul business. An exasperated Falconbridge adopted truck haulage.

Equipment Replacement

A changeover to piped slurry would be uneconomical today because of the horrendous environmental monitoring it would entail. In this recession, Pickard has opted for capital expenditures on items with a quick, 2-year payback. “We’re doing a lot of equipment replacement” he says. Load-haul-dump machines, jumbos and personnel carriers top his shopping list. The big commitments to capital expenditures for the Craig mine development (the company’s nickel/copper workhorse into the next century), the No. 3 shaft at Kidd Creek and environmental improvements at the smelter were all made before his time.

There are projects with longer-term paybacks on the backburner. For now, Pickard will have to wait until prosperity returns. However, he is attending to rising unit costs (he would not reveal what they were per pound of nickel produced). “I’m not happy with the level of costs,” he says. “We don’t want to get unit costs rising above inflation.” To communicate that message, he has held sessions with executives from all operations. As well, minesite energy conservation groups have been reactivated and the accent is on productivity gains. “We are not in a hiring mode,” says Pickard.

Power Concerns

Falconbridge is also concerned about power. It is the single biggest electricity consumer in Ontario, its annual bill running to $83 million. To suit its biggest user, Hydro some years ago offered Falconbridge interruptible power, which meant savings for the nickel company. (By statute, Ontario Hydro cannot discount power to any of its customers.) This worked well until 1988. That summer, Hydro invoked the “shut-down” clause. By December, 1989, major shortages again caused power outages at Falconbridge’s Sudbury smelter and Timmins metallurgical site. “We cancelled all the interruptible contracts after we saw Hydro’s own projected load demands and supply,” Pickard says.

Hydro has since altered the rules on interruptible power and Falconbridge is again on the system. It requires modifications at the mines and mills. The key is to shift, when possible, power requirements to non-peak-use hours. So Falconbridge runs sump pumps on the graveyard shift. At Kidd Creek, all four milling circuits operate only on Saturdays and Sundays.

Not so long ago, during the recession in the 1980s, Falconbridge had no long term and the short term was frightening to contemplate. Accelerating toward bankruptcy, the company was losing $2.2 million a week. His back to the wall, the then ceo, Bill James, ripped out a whole level of management (all the head office vice-presidents of operations), laid off head office exploration and engineering staff, and practically halted all mine exploration and development.

Through the lean years, mine exploration and development lagged. Since then, Falconbridge has halted the decline in reserves.

Generating excitement as well is a copper-lead-zinc deposit in the middle of the Sudbury Basin. “It’s a favorite of mine,” says Pickard, who worked on the metallurgy. With Kidd Creek facing capacity under-utilization by the mid- to late-1990s, this could prove to be a timely development.