(New throughout with detail on output, comments from Canadian
Electrolytic Zinc CEO, zinc prices, byline)
By Susan Taylor
TORONTO, March 23 Noranda Income Fund
said on Thursday zinc output at its Quebec plant, the
second-largest in North America, was at 50-60 percent of normal
operating levels as a five-and-a-half week long strike dragged
It was Noranda's first statement on plant output since the
strike began. Typical annual zinc production at the plant is
270,000-275,000 tonnes, Eva Carissimi, chief executive of plant
operator Canadian Electrolytic Zinc, a subsidiary of global
mining giant and trader Glencore Plc, said in an
Production of sulphuric acid and copper in cake byproducts
are at similar output levels to zinc, Noranda said, and Glencore
was working with customers to minimize disruption.
The strike, which began Feb. 12, is closely monitored by
traders as prices for zinc, a metal used to rust-proof steel,
continue to climb.
London zinc prices have nearly doubled over the past
13 months and are closing in on nine-year highs, as signs of
tightening supply in the global market for refined zinc means
the rally may have further to run.
Lower mine supply has pushed down treatment charges - the
fees that smelters charge to process ore into zinc - to historic
lows of around $30 a tonne.
Noranda has warned that it expects an adverse impact from a
new agreement with Glencore Canada starting May 2, which will
shift to market treatment charges from a previous fixed rate.
The plant, which had a headcount of 575 before the strike,
is being operated by "eligible" employees in management or
supervisory roles, for example, who do not run afoul of
provincial labor rules, said Carissimi.
The United Steelworkers of America union, which has accused
the company of using strike breakers, has said a Quebec
provincial judge denied its March 15 request for an emergency
injunction to halt production at the plant.
The union is proceeding with legal action and a court date
is set for May, said Manon Castonguay, president of the USW
The 371 unionized workers at the facility in
Salaberry-de-Valleyfield walked off the job over proposed
pension plan changes in a new collective bargaining agreement.
There are currently no talks scheduled.
"We have to ultimately find a way to get back to the table
and arrive at a contract that responds to the needs of the
union, but equally has to respond to needs of the company, which
is going through a major transition to market terms," Carissimi
(Reporting by Susan Taylor in Toronto and Ahmed Farhatha in
Bengaluru; Editing by Anil D'Silva and Andrew Hay)