Noranda reducing output of its zinc concentrate

Production of zinc concentrate will be reduced in 1993 by 40,000-45,000 tonnes of contained zinc because of the worldwide surplus of zinc concentrate, Noranda Minerals, a unit of Noranda (TSE), reports.

The production cuts will be made at New Brunswick operations of Brunswick Mining and Smelting (TSE), Geco, Heath Steele, Matagami and the Kidd Creek division of Falconbridge through a combination of summer shutdowns and mining plan changes designed to reduce zinc output, while increasing copper production, the company says.

No cutbacks in zinc production are planned at present at Noranda’s CEZ refinery near Montreal, said Alex Balogh, president of Noranda Minerals. “The problem is an excess of concentrate, in Noranda’s view,” he said. Output of zinc concentrate from companies in which Noranda has an interest totalled 530,563 tonnes in 1992, up from 450,351 tonnes in 1991. The cutbacks mean that Noranda’s stocks of zinc concentrate will be drawn down to normal working levels by year-end, the company says. Meanwhile, Noranda Inc. reported earnings of $79 million for 1992, compared with a loss of $133 million the previous year. For the fourth quarter of 1992, earnings were $4 million compared with a loss of $109 million in the corresponding 1991 quarter. These results include the contribution from Noranda’s 49.3% interest in MacMillan Bloedel which was sold this month for $971 million.

President David Kerr said the improvement in earnings was mostly attributable to the lower Canadian dollar, lower interest rates and cost reduction and pro-ductivity programs. He notes that commodity prices on average were lower in 1992 than in 1991.

Earnings from the company’s mining and metals group increased to $153 million in 1992 from $66 million the previous year. The forest products group earned $21 million compared to a loss of $75 million in 1991. Earnings of the oil and gas group were $59 million compared with $11 million in 1991. Noranda says it is expecting the Canadian dollar and interest rates to remain close to their present levels, which should permit some improvement in earnings and operating cash flows in 1993, although commodity prices are generally expected to remain at relatively low levels because of excess supply.