Teck mill to Highland Valley

The long dormant Highmont mill of Teck Corp. will be incorporated into the Highland Valley Copper partnership which until now only included Cominco Ltd. and Lornex Mining.

Cominco and Lornex put their respective copper/molybdenum operations into Highland Valley Copper which is now the largest base metal mine in North America. The Highmont agreement involves several steps but the net result will see 50% of the cash flow go to Cominco, 45% to Lornex, and 5% to Highmont.

Cominco will receive $16.7 million in cash from hvc to reduce its partnership interest to 50%. This will enable Lornex to retain its present holding (45%) and leave 5% for Highmont. Lornex will pay that amount to hvc which effectively will be passed on to Cominco. Teck President Norman Keevil Jr confirms that Highmont’s participation became effective Jan 4, the beginning of hvc’s fiscal year.

Poul Hansen, hvc president, says “engineering studies indicate that a combination of the Lornex and Highmont mills would increase the daily milling rate from the current 120,000 tonnes to 131,000 for an annual production of approximately 400 million lb of copper.”

Keevil believes the Highmont plant could be moved and tacked on to the Lornex mill and he confirms: “It’s being reviewed by the engineering people right now.” He feels there could be some long- term savings by moving the plant. But whether it’s worth the extra capital cost and time is another question.

The other option of course would be to build a conveyor to Highmont from Lornex. Last year Hansen estimated that moving it to Lornex would take about 1 1/2 years compared to one year for the construction of a conveyor sys tem. Also, with the Highmont mill in the picture, the old Bethlehem plant would probably be shut down.

Keevil says there are no immediate plans to draw feed from the Highmont property which is lower grade than the Valley orebody and contains more molybdenum which is still quite depressed. “If we get into a time in the 1990s when moly is very strong, it’s a fairly simple matter to switch back over. Moly doesn’t look that strong right now,” he notes.

Still bullish on copper, Keevil cautions that there is at least one new producer on the horizon that could upset the market balance. But he notes that most of the copper producers which survived the recession are producing flat out so there is little capacity left. Many of these companies are survivors “because they cut back on capital expenditures including stripping. That’s where there is potential for production shortfalls,” he says.