Noranda to idle Gasp copper smelter

Doing its bit to shore up copper prices, Noranda (NRD-T) will suspend production at the Gasp smelter in Quebec for at least six months, starting in May.

Since January, copper has lost about 16% of its value as demand softened and inventories built up. On top of that, toll smelting fees remain precariously low.

In March, Phelps Dodge (PD-N) became the first to sound the battle cry by announcing it was reducing production by some 80,000 tonnes per year. Most other major copper-miners have since joined the line, the chief exception being Codelco (Corporacion Nacional del Cobre de Chile), the world’s largest producer.

Gasp is the smallest of three copper smelters operated by Noranda, the others being Horne, also in Quebec, and Altonorte, in Chile.

In the first nine months of this year, the smelter produced 83,000 tonnes of copper-in-annode and 220,000 tonnes of sulphuric acid. Its closure will reduce Noranda’s overall smelting capacity by 15% and, consequently, annual cathode production by 13%.

The decision follows a poor third quarter in which Noranda lost $60 million, compared with net earnings of $52 million in the corresponding period last year. Lower realized metal prices and sales volumes were mostly to blame.

About 300 employees will be affected by the suspension.

Meanwhile, Noranda has signed a 3-year agreement with unionized employees at its CEZinc refinery in Valleyfield, Que. Eighty-three percent of the 540 card-carrying employees voted in favour of the deal.

In 2000, the refinery turned out 263,000 tonnes zinc and 400,000 tonnes sulphuric acid.