Noranda Inc., which has four main divisions — forest products, minerals, energy and manufacturing — boosted its over-all earnings last year to $603 million from $343 the previous year.
Divisional earnings from minerals rose by 44% to $203 million, compared with $141 million a year earlier. The mineral division also accounted for the largest share of Noranda’s net investment last year, grabbing 32.3% of the total.
Noranda Minerals, which counts 14 producing mines and five metallurgical plants among its holdings, is a major supplier of zinc, copper, precious metals, lead, molybdenum and sulphuric acid. It is also a major processor of primary and secondary copper.
The company attributes last year’s outstanding financial performance of the minerals division to buoyant markets, strong prices and high productivity.
Booming economies, especially in the United States, created the high demand, the company says. Horne smelter
Operations at Noranda’s Horne smelter were adversely affected by intermittent shutdowns for environmental reasons, and construction of a new acid plant was started. The division intends to reduce sulphur emissions by more than the regulated 50% and is committed to achieving a 70% reduction by 1995 from 1980 levels.
Strengthening the division’s resource base was the motivation behind a number of investments last year. One that attracted considerable attention was the company’s $334 million outlay to purchase an effective 23% control in Falconbridge Ltd. (TSE). Another was the $63 million purchase of a 55% interest in the 130 million tonne Noxon copper-silver deposit in Montana. Noxon, regarded as one of the largest silver deposits in the world, is expected to produce copper for a net cash cost of around $0.25(US) per lb, when developed.
On the exploration front, expansion of ore reserves is a primary goal for Noranda as it strives to maintain its position of strength in mining.
The company reports spending $88 million last year on 550 grassroots projects in North America and Australia. A total of 10 projects were advanced to the feasibility stage with production decisions made on three. Eagle River bet
This year, the company plans similar expenditures on grassroots exploration and three new feasibility projects will be added to the seven carried over from 1988. The most important of these is the Hemlo Gold (TSE)/Central Crude (VSE) Eagle River gold deposit near Wawa, Ont., where drilling to date has indicated about 1.6 million tonnes averaging 0.26 oz. gold (cut) per tonne.
Noranda’s star gold producer, Hemlo, operates the successful Golden Giant mine at Hemlo, where low production costs are the order of the day.
Other projects under investigation include the Black Pine gold deposit in southern Idaho, the Duck Pond base metal deposit in Newfoundland and the Tundra gold deposit at Courageous Lake, N.W.T.
The company sees reason for real optimism in 1989 since markets for metals and most forest products remain strong, and there is no significant evidence that a downturn is imminent. However, Noranda does expect some moderation of metal prices this year, and notes that the current economic expansion has already outlived most previous periods of sustained growth.
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