Teck Cominco resolves smelter strike

A strike at Teck Cominco's Trail smelter that left zinc concentrate from Red Dog mine stockpiled in Vancouver has ended after almost three months. Trail, in southeast British Columbia, is one of the world's largest fully integrated zinc and lead smelting and refining complexes. It closed in mid-July because of the strike by United Steelworkers. Senior Teck Cominco managers discussed this and other issues at an investors and analysts' day in Vancouver Sept. 26.

Two local unions of the United Steelworkers, representing 1,140 smelter workers and more than 170 office and technical employees, were striking for a larger share of Teck Cominco's record profits. The smelter is vital to the economy of the city of Trail, which has a population of about 7,575. "A strike in a small town is always a large concern, with management and union having to live together and work together in a relatively small space," Teck Cominco's senior vice president for marketing and refining, Roger Brain, said at the investors' day.

"I think what we have offered financially is attractive to get this settled and hopefully that will happen over the next few weeks, but I think both sides will have a job ahead of them to repair some of the damage that has been done and some of the things that get said during a difficult negotiation," Brain said. "So it will be a top priority for us and it will be a challenge in the short run."

Agreement ratified Oct. 5

The collective agreement at Trail, ratified Oct. 5, provides for wage increases of 10 percent, a 12-percent improvement in the basic pension, enhancements to a number of benefits and a C$3,500 cash payment.

Trail produces 23 different metal and chemical products and accounts for 4 percent of the western world's zinc production, according to Brain. Red Dog mine in Alaska's Arctic is the world's largest zinc mine. About one-third of the zinc concentrate from Red Dog goes to Trail, with the remainder sent to smelters in Japan, Korea and Europe.

China is now the world's largest consumer of zinc, which is used to galvanize steel, Brain said. China has become a net metal importer and its demand for copper is also growing. Teck Cominco announced Sept. 23 that it would proceed with a plan to extend the mine life of the Highland Valley Copper mine near Kamloops in central British Columbia by approximately five years to September 2013.

Highland Valley mine to be extended

The new plan involves the release of additional ore from the Lornex pit and the relocation of two in-pit crushers in the Valley pit, together with a push-back of the Valley pit wall to release 174 million tonnes of additional ore. Copper concentrate production over the remaining mine life is expected to average approximately 400,000 tonnes per year. Molybdenum production is expected to range from 3 million to 8 million tonnes per year, averaging 4.4 million pounds over the remaining mine life.

Teck Cominco is a diversified company, executives stressed, and the importance of gold should not be underestimated. Mike Lipkevich, senior vice president for mining, gave some details about the processes to be used at Pogo gold mine in Interior Alaska when it begins operations early next year. A refurbished SAG mill and ball mill will be used to crush the ore. About 60 percent of the gold will be recovered by gravity and go directly to bullion, Lipkevich said. The remaining 40 percent will be recovered by flotation and will be cyanided before it is converted into bullion.

No cyanided tailings will be dry stacked on the surface, Lipkevich said. The tailings that are produced from cyanidation, along with about 10 percent of the total ore, will be used for paste backfill underground. This means that cement will be added to the tailings to form a paste, which will be pumped underground to provide support for mining.