Letters to the Editor Cominco’s smelter means U.S. jobs

Recent press reports have wrongly portrayed Cominco’s large zinc-lead-fertilizer complex at Trail as a threat to employment in Montana and Idaho (N.M., Feb 1/88). The reverse is true.

Cominco’s smelter is directly responsible for 135 phosphate mining jobs in Montana and contributes to the employment of an additional 400 people in existing lead and zine mines in Idaho and Montana. The value of Cominco’s purchases from these mines exceeds $30 million per year.

Discussions are currently under way which may result in the start-up of other mines in the area, thanks to the ability of the Trail B.C., smelter to treat complex lead-zinc- silver-gold concentrates.

Bob Muth, vice-president for government affairs for Asarco in New York, has been recently quoted by the news media. These reports have included false statements about Cominco and misleading statements about the proposed U.S.-Canada free trade agreement.

The Canadian government is not “footing the bill” for Cominco’s lead smelter project at Trail. There is no 20% tariff on the zinc and lead Cominco sells in the U.S.; and many Idaho and Montana mines depend on our smelter at Trail as their main market. The “playing field” is very nearly level right now as far as lead and zinc smelters are concerned and the proposed Canada-U.S. free trade agreement would make it perfectly level in 10 years.

Cominco has spent about $400 million(US) (through debt) refurbishing its zinc plant and installing new environmental protection facilities at Trail. An additional $30 million is planned in the future to enable the plant to treat a greater variety of zinc concentrates.

The reason for Cominco’s large expenditures at Trail was that the company made a fundamental decision in the late 1970s to stay in the zinc-lead smelting business for the long haul. In Cominco’s view that equated to installing the latest technology which would ensure competitive operating costs, protection of the environment and protection of the health of its employees. Cominco’s current lead smelter modernization project at Trail is a 2-stage $260-million(C) project using a unique state-of-the-art oxygen smelting process. When completed in the early 1990s, this new smelter will meet all environmental and hygiene standards.

The governments of Canada and British Columbia are investing $134 million in the project through the purchase of preferred shares which provide for dividends up to 12% depending on lead and silver prices. Over the past 50 years of historical prices, dividends would have averaged about 8% under the formula. This is clearly not a subsidy.

Current tariffs are 3.5% on refined lead and 1.5% on refined zinc, a far cry from the 20% rate attributed to Muth. At current prices this equates to about 1.2 cents per lb for lead and 0.7 cents for zinc. Under free trade, these tariffs would be gradually eliminated over a 10-year period.

The market price for lead has risen from 19 cents to 34 cents per lb over the past two years. Given the 15 cents price rise compared to a 1-cent tariff, it is hard to support the statement that “the historic East Helena smelter of Asarco Inc. might be closed by the U.S.-Canada trade agreement.”

Cominco’s Trail smelter purchases significant amounts of products from Montana and Idaho. The recent start-up of the Warm Springs, Mont., phosphate mine which employs about 135 people was only possible through a long- term purchase agreement by the Trail smelter.

The smelter also purchases zinc concentrates from Pegasus Gold’s Montana Tunnels property near Jefferson City. That operation employs 160 people. There are no other North American smelting complexes which can economically provide the essential gold recovery from this type of zinc concentrate.

The lead concentrates from Montana Tunnels go to the Asarco smelter. Cominco purchases about 50% of the silver-lead concentrates from Hecla’s 200-employee Lucky Friday mine at Mullen, Idaho. Asarco purchases the remaining 50%.

Asarco has come out strongly against the proposed U.S.-Canada free trade initiative, which is its prerogative. It is unfortunate that Asarco has done so through direct attacks on Cominco and the use of misleading statements about current tariff levels.

Cominco believes that its zinc- lead smelting complex at Trail is beneficial to the economic stability of Montana and Idaho. Many mine operators and their employees in these states support Cominco’s viewpoint. We know because we’ve asked them. William J. Robertson vice-president operations Cominco Ltd., Trail B.C.