CAW Calls for Government to Make Xstrata Divest Assets in Timmins, if Closure Ensues
February 8, 2010, 1:30 AM EST
The CAW is calling on the federal and provincial governments to thoroughly investigate international mining giant Xstrata, including the reason for closing its Timmins Kidd metallurgical site. This call comes hours before Xstrata releases its annual report with its profit for 2010.
Should this investigation conclude that Xstrata has little reason to close the Timmins site, both levels of government must force Xstrata to divest their Timmins assets, says the CAW.
"Xstrata must not be allowed to extract local resources without creating local jobs," said CAW President Ken Lewenza.
The closure is slated for May 1, a move the CAW is calling wholly unnecessary. Currently Xstrata plans to shift production from Kidd to smelters and refineries in Quebec, cutting approximately 670 jobs.
According to the Investment Canada Act, the federal industry minister retains the power to review the implementation of an investment (by a foreign company) and determine whether it varies from the original application and still results in a "net benefit" to Canada. If this is not the case, federal Industry Minister Tony Clement can force a company to remedy the situation or even sell some of its assets.
In Ontario, the Mining Act requires that ore and minerals be treated and refined in Canada. Failing to do so allows the minister of natural resources to withdraw the company's mining rights.
"We're calling on the federal and provincial government to enforce a moratorium on the closure, until this matter can be properly investigated," said Lewenza.
According to a CAW report released today, Xstrata's revenue remained steady despite a sharp downturn in resource prices in 2008 and 2009. Now prices are on the rise, with analysts expecting them to reach the highs of the recent boom of 2006-2008.
Some other key findings from the report "Our Resources Stay Here: Seven Reasons Why the Xstrata Metallurgical Site Must Stay":
-In the last number of months, metal demand has improved sharply, acid demand is returning to historically high levels and the Canadian dollar is trading at the same range as during Xstrata's bid for Falconbridge in 2006.
-As the global economy continues to recover and metal prices climb further, analysts forecast that revenue will climb by 27%.
-The Kidd operations remain highly profitable and the metallurgical site is among the most environmentally sound in the industry.
The report Our Resources Stay Here: Seven Reasons Why the Xstrata Metallurgical Site Must Stay is available at: http://www.caw.ca/en/8442.htm