(Adds comment from union president, stock price, updates zinc
By Susan Taylor
TORONTO, March 1 Noranda Income Fund
said on Wednesday it was deferring its 2017 zinc production and
sales forecasts due to an ongoing strike by workers at its
Quebec processing plant, the second-largest in North America.
It is uncertain how long the strike, which began Feb. 12,
will continue at the zinc processing facility in
Salaberry-de-Valleyfield, said Noranda, as it announced
The plant's 371 unionized workers, represented by the United
Steelworkers of America, walked off the job after the two sides
could not agree on proposed pension plan changes in a new
collective bargaining agreement.
"We're waiting for management to call us," said USW Local
6486 President Manon Castonguay, adding that no meetings are
Members are "going strong," she said, adding that "they're
not going to give up what we fought for."
Operations at the plant, the biggest in eastern North
America and managed by a subsidiary of Glencore Canada,
have resumed "partial production," with management operating the
facility, Noranda said. "Management is in the process of
evaluating its production capacity under this scenario," it said
in a statement.
The company said it expects 2017 financial results to be
adversely impacted by the shift to market terms, with spot
treatment charges near historic lows. Noranda will pay market
prices starting May 3, replacing the previous fixed rate.
Zinc prices have nearly doubled since January 2016 due to a
shortage tied to mine closures and shutdowns. The price of zinc
was up 1.35 percent on Wednesday at $2,861 a tonne.
In the fourth quarter, Noranda said zinc metal production
increased to 72,291 tonnes, from 71,971 tonnes in same period
last year. Sales declined to 69,196 tonnes from 79,552 tonnes.
Noranda posted a C$29.8 million ($22.39 million) loss before
income taxes in the three months to Dec. 31, compared to
earnings before income taxes of C$900,000 in the year-prior
quarter. The decline reflects lower net revenue, which dropped
to C$83 million from C$91.2 million, and a C$52 million
impairment charge, the company said.
Efforts to boost efficiency and reduce costs led to 2016
production of 277,022 tonnes of zinc metal and a 2 percent cut
to operating costs, Noranda said.
Noranda units were down 1.3 percent at C$1.52 on the Toronto
Stock Exchange Wednesday afternoon. Year-to-date, the units have
lost 36 percent of their value.
($1 = 1.3311 Canadian dollars)
(Reporting by Susan Taylor; Editing by Paul Simao and Diane