Re: Sudbury shutdown this summer
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Message: Sudbury shutdown this summer
FNX may suspend remaining production in Sudbury, in light of Vale Inco shutdown - comment on this story
Updated 7 hours ago
FNX Mining is considering suspending is remaining production in Sudbury due to Vale Inco's decision to temporarily shut down its operations in the Canadian metals hub, Reuters is reporting.
Toronto-based FNX processes its ore at facilities owned by Vale, which became the main operator in the historic mining town when it acquired Canada's Inco in 2006.
FNX, which has already suspended its nickel production and has been mining only copper and precious metals, may also consider stockpiling ore until the planned eight-week Vale shutdown ends, or it could ship ore to a third-party processor, company spokesman David Constable said Friday.
"We haven't really made up our mind on that. We basically, right now, are getting more of the details (from Vale) and we're really looking at several alternatives for our production plan," he said.
Shipping the ore to another party, which is FNX's right under its agreement with Vale, would be an unlikely possibility, Constable said.
Complicating matters is the fact that Vale recently began contract talks with unionized workers at its Sudbury operations. The agreement expires May 31 and a failure to come to a new deal could stretch out the shutdown.
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"It's not quite clear how long this will in fact last," said Constable. "Will (Vale) restart it July 27 with or without a contract in place? We don't know."
However, he said FNX would continue to develop its Levack Footwall deposit, one of two deep high-grade deposits on which the company is depending for future production.
In a research note, RBC Capital Markets analyst Adam Schatzker said he expects FNX will shut down its mining operations for the duration of the Vale Inco closure, saying the move would have only a limited impact on FNX.
Brazil's Vale announced the shutdown late on Thursday as part of a plan to trim global nickel output, blaming flagging demand for the metal as the global economy has slowed.
The move, which follows a decision by Anglo-Swiss miner Xstrata (XTA.L) in February to suspend the bulk of its Sudbury operations, caps a remarkable downturn in the nickel hub's fortunes as the metal's price has plunged about 80 percent in less than two years.
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