Vancouver — The continuing power shortage in the United States pushed profits up for Cominco (CLT-T), the world’s biggest supplier of zinc concentrates, in the first quarter of 2001.
Cominco posted earnings of $83 million, or 97 per share, for the quarter ended March 31. This marks a significant increase over earnings of $20 million, or 23 per share, in the year-ago quarter.
The surge in profits was the direct result of increased power sales to the United States at above-normal rates.
In order to increase its power exports to the U.S. electricity grid, the company has cut zinc production at the Trail refinery in British Columbia by 120,000 tonnes between last December and September of this year.
The sale of surplus power, combined with metal sales, resulted in a $97-million pretax improvement in the operating profit from Trail. This was mainly due to a $122-million increase in operating profit from power sales. Trail’s surplus power sales volumes have nearly doubled and power prices are 18 times higher than they were in the first quarter of 2000.
Offsetting the stellar gains generated by power earnings was a $25-million reduction in operating profit from Trail’s metal operations. The drop was the result of lower production from the zinc operations and a lower average zinc price.
Revenue from copper products was $9 million higher than in 2000. The Highland Valley operations contributed an additional $31 million, due to higher sales volumes.
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