Noranda set to close Mattabi, Lyon Lake base metal divisions

Noranda Minerals, a unit of Noranda (TSE), has decided to shut down operations this spring at its Mattabi and Lyon Lake base metal divisions, about 80 km north of Ignace, Ont. The company cited recent financial losses and a failure to locate new ore reserves as the main reasons for the closure.

Both operations, which employ 240 people, are in the Sturgeon Lake mining camp of northwestern Ontario.

A combination of depressed metal prices and high operating costs resulted in mounting losses at the Mattabi operation over the past four months, Noranda said. The Lyon Lake mine’s relatively high operating costs are due to the widely dispersed nature of its ore lenses. As well, exploration activities have failed to extend the mine’s ore reserves.

Mining operations at the Mattabi mine were originally ceased in 1988 when the project’s ore reserves were exhausted. The Mattabi mill continued to produce zinc, copper and lead concentrates from the nearby Lyon Lake underground orebody.

Noranda said Mattabi’s workforce will be reduced between now and May 22, from its current 240 to an estimated 25 who will be retained to oversee care and maintenance at the two properties.

Production prior to shutdown is projected at 3,900 tonnes of zinc and 270 tonnes of copper in concentrate. Those figures compare with 25,600 tonnes of zinc and 2,100 tonnes of copper in concentrate produced in 1990.

First discovered in 1969, the Mattabi operation began production in 1972 from a 13-million-ton polymetallic sulphide orebody. Noranda said all laid off employees who are affected by the shutdown will be assisted by an industrial adjustment committee. The company has also established a severance package for the laid off employees.