Hudbay’s corporate management has spoken of plans to place Flin Flon processing assets on hold following the eventual closure of two area mines, but the head of Manitoba operations says there is a “grey area” at play.
A PowerPoint slide from Hudbay’s annual general meeting held May 19 lists four points under the heading “777 and Reed Mines,” including: “Plan to keep Flin Flon processing assets on care and maintenance after mine closures to maintain regional optionality.”
“Care and maintenance” is the mining term for closing an operation while ensuring it is properly maintained so that it can reopen as circumstances permit.
Days after the AGM, Rob Winton, vice-president, Manitoba Business Unit, said Hudbay had no plans to close its Flin Flon metallurgical complex and was exploring other sources of feed to offset the eventual closure of 777.
The Reminder asked Winton about his comments and the statement made at the AGM. Is the corporate statement more of a worst-case scenario?
“The AGM slide wording is the black and white answer to the question,” replied Winton in an email (quotations and brackets his). “The grey area is the amount of work and understanding required of how that end result fits with the business plans and opportunities that the Metallurgical Facility affords Hudbay. The ultimate ‘closure’ plan for the scenario of no ore or concentrate being available in Flin Flon (economically justified) is to place the valuable and sustainable assets on ‘care and maintenance.’”
The AGM slides also stated that “Hudbay is managing its business for lower commodity prices.”
The slides put the projected lifespan of the company’s three northern Manitoba mines at 15 years for Lalor, five years for 777 and three years for Reed.
During an address to the Flin Flon and District Chamber of Commerce last month, Winton said Hudbay faces a reality in which 777 and Reed – and their combined 5,300 tonnes of ore per day – will close in five and three years respectively.
But he said the metallurgical facility, which processes ore from those two mines, could handle concentrate brought in from the outside and that such opportunities were being explored.
“There’s lots of [junior companies] in the area that are busy,” said Winton. “Not a lot of them have [had] a great deal of success, but we have five years with which to find ore to supplement the feed here in town.”
Winton also pointed out that the zinc plant, which is part of the metallurgical complex, has the ability to operate at tonnages lower than current levels.
He added that Hudbay’s Flin Flon infrastructure “comes along once in a lifetime…so getting rid of it is not in our plans.”
Winton further said capital dollars are flowing to northern Manitoba as Hudbay plans a paste plant in Snow Lake, and that the possibility of gold mining at Lalor and a potential gold mill would open up new opportunities.
