Falco to shut down cobalt shipments

Nickel producer Falconbridge, now in the eighth week of a strike at its operations in Sudbury, Ont., has declared force majeure on contracted shipments of cobalt to consumers.

The declaration, which is to take effect Nov. 1 for European and North American customers, permits Falconbridge to suspend deliveries to its customers without being in breach of supply contracts. Customers in Asia are to receive currently ordered November shipments but will be included in the force majeure declaration on Dec. 1.

The declaration will probably not have an impact on labour negotiations.

“The fact that we have to declare force majeure on cobalt is unfortunate, but it does not affect our stance on labour negotiations,” says Craig Crosby, a spokesman for the company.

The mines and mills have closed down, but the smelter is being operated by supervisory staff. The company has enough ore to postpone declaring force majeure on nickel shipments at least until Nov. 1, insists Crosby.

Union officers representing Falconbridge’s workforce at the Kristiansand refinery in Norway, which refines nickel shipped from the Sudbury smelter, have suggested that the refinery workers may refuse to handle nickel produced by the smelter during the strike.

Crosby says Falco is attempting “to avoid that situation” by talking with union officers at Kristiansand.

Local 598 of the Canadian Auto Workers Union went on strike at the company’s Sudbury mines, mills and smelter on Aug. 1. The last formal talks between union and management broke off on Sept. 4.

A key issue for the parties is the possibility that Falconbridge may subdivide its Sudbury operation into smaller business units. The union prefers to keep the present division between the smelter, on the one hand, and the mines and mills, on the other. When talks broke off, Falco had offered to refrain from subdividing the Sudbury operation into smaller business units, but the proposed contract was rejected by the union’s negotiating team.