Hudbay has no plans to process zinc from outside mines as part of a proposal to maintain its zinc plant after 777 mine closes, the company has confirmed.
Last year, a Hudbay official raised the possibility of purchasing concentrate from other mines to supply post-777 feed to the
Flin Flon metallurgical complex, which includes the zinc plant.
Scott Brubacher, the company’s director of corporate communications, offered clarification last week, saying zinc importation is “not under consideration.”
Brubacher said Hudbay’s sole focus is its “three pillars plan” to keep the zinc plant running at reduced capacity after 777 closes in 2019 or 2020.
An outline of the plan provided by Hudbay makes no mention of outside concentrate, only the potential for the zinc plant to continue processing feed from the company’s Lalor mine near Snow Lake.
Shipping other companies’ concentrate to Flin Flon, Brubacher said, is not a feasible proposition.
“Even if zinc concentrate was widely available, the shipping costs are big and go straight to the cost of production,” Brubacher said. “The other zinc plants in Canada are located much closer to seaports, particularly in Quebec, so their costs are lower. Hudbay would have to ship to and from Flin Flon by rail, adding to its costs. And zinc concentrate isn’t in high supply. Hudbay would be competing for a scarce commodity and paying the price it commands. Economically, it doesn’t add up to a viable solution.”
Brubacher also clarified that Hudbay’s proposal to keep the zinc plant open would require $15 million in ongoing cost savings at the zinc plant, oxygen plant and powerhouse – not a one-time cost reduction as some workers mistakenly believed.
Asked if there are any other misconceptions about Hudbay’s plan, Brubacher reiterated the company’s faith in the three pillars plan as the best possible plan amid difficult circumstances.
“That is what we’re working toward,” he said. “The results from that work will determine what actually happens. We’ve got a year ahead of us. So we’d caution against speculation or wishful thinking and encourage everyone to focus on what they can do to contribute to the plan that’s been laid out. The three pillars plan must be the sole focus for 2017.”
Hudbay has asked its workers to devise ways to reduce costs by $15 million at the zinc plant and associated facilities. If those savings can be achieved, Hudbay believes the zinc plant can operate at 60 per cent of current capacity by processing feed from Lalor.
That would save between 300 and 400 company jobs in Flin Flon. Under the company’s best-case scenario, 500 jobs will be reduced by 2019 or 2020 when 777 and the Flin Flon mill are due to close, with 200 of them coming through layoffs.
In May 2016, Rob Winton, then head of Hudbay’s Manitoba division, told local business leaders the company was exploring “opportunities to bring concentrate to Flin Flon” and that “different opportunities [exist] with respect to purchasing ore.”
Though optimistic in his remarks, Winton did not confirm that such opportunities were viable, only that they were on the table.
Hudbay currently has about 940 positions in Flin Flon, 60 at Reed mine and another 350 in and around Snow Lake. A number of Reed and Snow Lake employees live in the Flin Flon area.
