Kennecott slashes copper output

Denver — Kennecott Utah Copper, a subsidiary of Rio Tinto (RTP-N), has suspended operations at the North concentrator and cut 235 workers in an effort to reduce costs.

Operations, including rail haulage, will be suspended for 18 months, beginning in early June, though layoffs, representing 10% of the workforce, will not take effect until the end of July. Kennecott will offer enhanced early-retirement plans to eligible salaried workers.

The North concentrator, part of the massive Bingham Canyon operation, west of Salt Lake City, produced 30,000 tons of copper in concentrate in 2000. Its closure will cause ore production to shrink 18% to 145,000 tons per day.

However, Kennecott says higher grades at the mine, combined with stockpiled concentrates, should keep the smelter and refinery working at full capacity for at least the next 18 months.

Production in 2001 is expected to reach 320,000 tons of refined copper, though, if the North concentrator is not reopened, this will fall 18% by 2003 and 2004.

The concentrator is Kennecott’s oldest plant at the Bingham complex. The Bonneville crushing and grinding circuit was built in 1966, and the Magna flotation facility was upgraded in 1982. The concentrator was slated to close in 1988 after Kennecott completed modifying the Copperton concentrator, but it was kept running because of then-high copper prices.

However, prices for the red metal have been in the dumps for the past three years, resulting in a 33% drop in U.S. copper production.

Plunging copper prices also put the pinch on Phelps Dodge (PD-N), which laid off 80 workers at the Tyrone copper operation in New Mexico.