Lead emissions to drop by 70-80% — Cominco, B.C. government

Base metal producer Cominco (TSE) and the British Columbia government have set the stage for modification and environmental upgrading of the company’s smelter complex at Trail, B.C.

Agreements between the two parties are expected to ensure completion of a project aimed at improving the zinc-lead smelter, and also result in the sale of certain hydro-electric expansion rights to the province.

The plant was previously investigated by a government-appointed job protection commissioner who recommended actions be taken by the company, the union and the government to make the operation more competitive. Cominco was able to make progress with unions and suppliers, but government-related issues took almost two years to resolve.

The recent agreements appear to please all concerned parties, including Premier Michael Harcourt, who called it “a win, win, win” agreement aimed at ensuring Trail’s long-term future.

The company will proceed with construction of a Kivcet lead smelter and slag fuming plant at a cost of about $145 million, and zinc expansion at a cost of about $25 million.

Cominco will receive $51.8 million by selling the province rights to expand power production at its two dams. Those funds will be directed toward the modification and expansion project, but the remainder is to be financed from corporate cash flow over the next several years. As well, Cominco continues to seek compensation for the QSL technology failure from Lurgi. “This is a significant deal, a commercial deal, and a good agreement for the province,” said provincial Mines Minister Anne Edwards. “It will protect 1,900 direct jobs at Trail, 660 direct jobs at Cominco’s Sullivan mine (near Kimberley, in the southeast) and a total of 6,000 jobs related in one way or another to Cominco’s Trail operations.”

Edwards said another advantage is that the smelter will be able to process ore from various undeveloped deposits in the province. She added: “We will also have a smelter complex that is able to meet higher environmental standards.”

The new lead smelter will replace the failed QSL (Queneau-Schumann-Lurgi) lead-smelting furnace, which was fired up in late 1989 as part of a modification program that began in 1976. After process and mechanical problems forced a shutdown in 1990, Cominco continued lead production at the old lead smelter. (Note: The Kivcet process was originally considered by Cominco before the Teck-led consortium acquired control of the company in 1986.)

The new lead smelter is expected to reduce lead emissions by 70-80% and will consume large existing stockpiles of residues, thereby addressing an environmental concern. Annual capacity will increase to 120,000 from 100,000 tons.

The Kivcet process replaces, in one electric furnace, the processes of sintering and blast furnacing required by conventional techniques. The exceptional flexibility of Kivcet lies in its ability to treat a broad range of concentrates, residues and recycled materials. At Trail, the process will consume large stockpiles of zinc plant residues and other materials that have accumulated since the zinc operations began to be modified and expanded. Engineering work is under way, with construction expected to begin this fall and startup scheduled for 1996. Over the next three years, the zinc expansion program will increase annual production to 320,000 from 290,000 tons. Cominco’s negotiations with the government also dealt with power production at its Brilliant and Waneta dams. The company agreed to sell the province rights to expand power production at these dams for $51.8 million but retained a 15% income interest, to begin once the expansion projects are paid off.

“We also retain our existing power sources, to meet the needs of our operations and to meet our commitments to West Kootenay Power,” Fish said. About two-thirds of the energy generated at the dams goes to supply Cominco’s power requirements. The remainder is sold to West Kootenay Power under long-term contracts and to other utilities in Canada and the U.S. The government is pleased with the agreement because each dam can be expanded using excess flows, and the development of additional power would cost less than building dams and power plants at new sites.

Cominco is expected to benefit from a government initiative which reclassifies water rental fees payable to government by companies generating their own power sources.