More production cuts by Inco

Further production changes aimed at reducing costs have been announced by nickel producer Inco (TSE). As of March 1, the lowest-grade, highest-cost mine in the company’s Ontario division, Creighton No. 3, will be shut down and maintained on a standby basis. And production from a low-grade open pit, Whistle mine, which is being operated under contract, will be reduced by 50%.

Employees affected by the measures will be transferred primarily to capital development at the Creighton No. 9 mine and other high-grade producing mines, the company says.

Also, in the company’s Manitoba division, scheduled buildup of production from the Birchtree mine will be slowed.

In January, Inco announced that planned nickel production in 1990 would be reduced by 20 million lb. to 400 million lb., primarily by elimination of overtime at its Ontario and Manitoba divisions and at its refinery in Clydach, Wales.

Nickel producers have cut back following a drop in the nickel price. As high as US$8 per lb. in early 1989, nickel recently fell on the London spot market to below $3 before recovering slightly.

Canada’s other major nickel producer, Falconbridge Ltd., said it will trim its 1990 nickel output by 10% to 135 million lb. The cutback will affect about 250 workers.

The lower nickel price does not seem to have affected Inco’s or Falconbridge’s capital spending plans at Sudbury, where three new mines are being built to sustain existing production.

At the small Redstone mine near Timmins, Ont., Timmins Nickel (TSE) recently laid off 46 workers. The cutback will reduce the company’s nickel output to 1.5 million lb. from a planned five million lb. The mine was opened about a year ago.

Significant job losses, totalling 1,600 mine workers, will result from the decision of Rio Algom (TSE) to close its Quirke and Panel uranium mines at Elliot Lake, Ont., in mid-1991. The depressed spot price of uranium is a major reason for the layoffs.

In British Columbia, the first big mine closure of the year was announced by Cominco (TSE), which decided to shut down its money- losing Sullivan zinc mine at Kimberley and lay off 700 unionized workers.