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Xstrata Nickel Chief Executive Officer Ian Pearce on Sustainability in 2010

Xstrata Nickel CEO Ian Pearce

The following excerpt by Xstrata Nickel Chief Executive Officer Ian Pearce is from the 2010 Xstrata Nickel sustainability report. The full report is available at: Our Approach to Sustainability-Xstrata Nickel


At Xstrata Nickel, we recognize sustainability as fundamental to our long-term success and connected to everything we do. We believe that we must take a principled approach to doing business and continually balance economic, social and environmental considerations in order to create value today and for generations to come. To this end, we have clearly defined Xstrata Nickel’s Vision and Values, as well as a set of Behaviours and Leadership Traits, to guide our actions in all circumstances and through all business cycles.

These guiding principles shaped our responses during the global economic crisis of the past couple of years, as customer demand collapsed. We made some bold decisions in placing sites on care and maintenance and deferring certain growth projects in order to ensure that Xstrata Nickel remained financially robust while preparing for the future. As a result, the organization now operates from a much lower cost base. We are also developing and optimizing a leading growth portfolio through projects such as Nickel Rim South and Koniambo, and have attractive future growth options at Kabanga, Fraser Morgan, Sinclair and other projects.

As we restructured our business, our first priority was to ensure that displaced employees were treated fairly and respectfully. In places such as the Dominican Republic, we stepped up our tree-planting program and were able to offer many employees jobs planting trees instead of mining. In Sudbury, we offered early retirement incentive programs to lessen the impact of moving high cost, end-of-life mines to care and maintenance.

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“The Great Canadian Mining Disaster” -by Jacquie McNish (November 25, 2006) – Globe and Mail’s Report on Business Inco Mining Story

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media.

This article was the cover story of the Saturday, November 25, 2006 edition of the Globe and Mail’s Report on Business Section. Jacquie McNish’s 16,000-word article on the failed Inco/Falconbridge merger has become the definitive account of this Canadian business tragedy.


Scott Hand had a dream, to keep Inco Ltd. in Canadian hands. But he didn’t count on corporate betrayal, political apathy, a new bread of shareholders, and a lack of boardroom bravado


The horizon clears

Inco sees its future

After days of murky weather, a wool fog lifted off central Labrador, revealing the bald rugged terrain explorer Jacques Cartier dismissed as “the land God gave to Cain.” The momentary clearing allowed a clutch of travellers to dash to two turbo props marooned at Happy Valley Goose Bay airport.

These were no ordinary tourists. Leading the parka-clad pack was Scott Hand, patrician chief executive officer of the world’s second-largest nickel producer, Inco Ltd. Behind him, eager to explore Cain, were an elite corps of international executives. Rick Waugh, CEO of Bank of Nova Scotia, a man who is gobbling up more Latin American banks than Butch Cassidy and the Sundance Kid, was here. So was David O’Brien, chairman of EnCana Corp. and Royal Bank of Canada. Joining them were Glen Barton, retired chief of Illinois’ Caterpillar Inc.; John Mayberry, onetime CEO of Hamilton steel maker Dofasco Inc.; and Francis Mer, retired boss of European steel maker Arcelor SA and a former finance minister of France. Inco directors one and all, they scrambled to the Dash 8s under an uncertain sky to see for themselves the 21st century’s first great mining startup: Voisey’s Bay.

Mr. Hand, however, wanted his directors to see more than a prosperous mine on the afternoon of Sept. 20, 2005. Although Inco was still digesting the $4-billion, 1996 purchase of Voisey’s Bay, he believed it was time to deal again. Rival Falconbridge Ltd. was in play, presenting Inco with an opportunity to forge a global powerhouse by bringing some of the world’s richest copper and nickel deposits under one corporate entity. Continue Reading →

Falconbridge’s Nickel Laterite Koniambo Project in New Caledonia – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.This article was originally published – April/2006

Another major Canadian player in New Caledonian nickel is Toronto’s Falconbridge Ltd. (soon to be swallowed by Inco Ltd.). Falconbridge and its 51% joint venture partner Société Minière du Sud Pacifique S.A. (SMSP), are developing the Koniambo Project in the northern part of the island for start up, perhaps as early as 2009.

Last month, Falconbridge and SMSP (which is owned primarily by the North Province) created an operating company, Koniambo Nickel S.A.S. under the leadership of president Brian Kenny. Koniambo Nickel will hold title to the Koniambo deposit. On March 1, the French minister of overseas territories François Baroin laid the ceremonial first stone for the Koniambo project.

The following day the Koniambo Nickel board met to approve this year’s work program. Preparing the earthworks and advancing the project engineering are the top priorities for 2006. Dredging of a port will begin early in 2007, and the main construction period will be 2008-09. Production will begin very late in 2009 or early in 2010.

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Calls to Nationalize Nickel Industry During Xstrata Layoff Support Meeting – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

It was standing room only at the Quality Inn Tuesday night, when 350 people took part in an event organized by local federal and provincial NDP politicians for laid off Xstrata workers. The group listened to rhetorical speeches by everyone from NDP Leader Jack Layton to Mayor John Rodriguez to Dwight Harper, president of Mine Mill Local 598/CAW workers.

Some comments, such as Harper’s wish to nationalize nickel production, were reminders of bad community feelings during major layoffs in the late 1970s. At that time, both Falconbridge and Inco outraged workers by cutting thousands from both their workforces.

Last week, both Xstrata Nickel and the Conservative government of Stephen Harper were roundly condemned by local politicians and labour leaders for not living up to a three-year no layoff agreement. The agreement was signed in 2006 when Falconbridge was taken over by Swiss mining giant Xstrata.

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Statement by Greater Sudbury Mayor John Rodriguez on the Xstrata Cutbacks

Greater Sudbury Mayor John RodriguezThis statement was released on February 11, 2009

I want to take an opportunity this evening to speak directly to the people of Greater Sudbury.

As Mayor of this great city, both here at home and wherever I have had the opportunity to travel, I have always said that, “if you want to know anything about mining, you come to Sudbury!”  Mining built this community and, though we have made strong advances in economic diversification, mining remains at the heart of our local economy.

On Monday of this week, 686 of our fellow citizens lost their jobs with Xstrata Nickel, and we were reminded once again that being the Mining Capital of Canada means not only benefiting from the boom cycles in metal prices, it means dealing with the bust cycles as well.  This week’s news is a devastating blow to this city, and it will have ripple effects across many sectors.  Just six to twelve months ago, these same employees were spreading the good fortune of their nickel bonuses throughout the community, creating strong demand for housing, cars, recreational equipment and entertainment.  Now their financial pain will also be strongly felt.

Monday’s announcement was not entirely unexpected.  Continue Reading →

Sudbury Angry Over Xstrata Job Cuts – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

“Xstrata Nickel today [Feb. 9, 2009] announces plans to restructure its Sudbury operations in response to ongoing challenging market conditions.” With those words the Swiss mining giant axed 686 jobs in Sudbury, Ont., and touched off a firestorm of protest from residents and union leaders.

Some of the closures were expected. In November 2008, Xstrata said it would accelerate closure of the Craig and Thayer Lindsley mines that were near the end of their productive lifespans. Operations there ceased with this month’s announcement.

The Fraser mine complex will be placed on care-and-maintenance, and the Strathcona mill will run with two work shifts rather than four due to the reduction in feed tonnage. The smelter is expected to operate at a level similar to 2008 thanks to concentrates from the new Nickel Rim south mine and Xstrata Nickel Australasia. Concentrates from the Montcalm and Raglan mines, as well as third-party feed, will also be treated.

Not all the news is bad, just the loss of 686 jobs.

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Xstrata Layoffs in Sudbury: Short-term Financial Gain and Long-term Hiring Pain – by Stan Sudol

Global commodity prices have fallen off the cliff. ThyssenKrupp AG, Germany’s largest steelmaker, recently stated that not since the end of the Second World War has the demand for steel fallen so rapidly. Steel is the fundamental building block of all infrastructure and manufacturing activities.

These are extraordinary economic times, so we all knew this was coming.

Yet no one was prepared to see Xstrata Nickel chop its Sudbury workforce in half – 686 layoffs and 210 early retirements. Like most in the community, I am shocked and very, very angry. This kneejerk reaction from Zug, Switzerland has two serious repercussions that will affect the Canadian mining sector for a long time. The first is this: should Canada have allowed foreign companies to take over such a strategic resource as the Sudbury Basin with such weak controls on jobs and investment and, second, how will these severe employment cutbacks impact impending labour shortages in the mining sector?

To be fair, regardless of who owns the two nickel miners, the fundamental issue is that you cannot continue operating if it costs $6 to mine a pound of nickel and you can only sell it for $5. Continue Reading →

Sudbury Community Furious About Xstrata Layoffs – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Many Sudbury residents are furious that Xstrata Nickel laid off 686 workers Feb. 9 given an anti-layoff agreement the Swiss company signed in 2006 when it took over Falconbridge Ltd.

“In July 2006, the Minister of Industry allowed the Swiss-based Xstrata to buy-out Canadian based Falconbridge, on the condition that Canadian jobs would be protected for three years,” said Sudbury New Democrat MP Glenn Thibeault, in a release.

“This (announcement of layoffs) is cold comfort to the 700 Canadians who have lost these so-called protected jobs,” said Nickel Belt New Democrat MP Claude Gravelle.

Both federal politicians said there is still time for the federal government to say no to the job cuts.

In an Xstrata release dated July 25, 2006, it is stated, “to demonstrate net benefit to Canada in order to obtain the approval under the Investment Canada Act, Xstrata has provided to the minister several important commitments in respect of Falconbridges’s operations and employees in Canada.”

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Xstrata Nickel Announces Restructuring of Sudbury Operations (Company Press Release)

Toronto, 9 February 2009

Xstrata Nickel today announces plans to restructure its Sudbury operations in response to ongoing challenging market conditions.  The restructuring follows the announcement in November 2008 of the accelerated closure of the end-of-life Craig and Thayer-Lindsley operations at Sudbury, both of which will cease operations with immediate effect.

As a result of the restructuring, the Fraser Mine Complex will be placed on care and maintenance and associated support and administrative functions will be reorganized. The Strathcona Mill, with annual capacity of 2.7 million tonnes of ore, will be reduced to two work shifts from four as a result of reduced feed. In addition, the Fraser Morgan development project will be deferred. This project will be evaluated on an ongoing basis and may be re-initiated when economic conditions allow.

Today’s announcement does not impact the world-class Nickel Rim South project in the Sudbury basin.  The project remains on schedule to ramp up to 60% of its ultimate 1.25 million tonne per annum production capacity in 2009, equivalent to approximately 7,400 tonnes of nickel.  Nickel Rim South will become a low-cost, cornerstone operation in Sudbury, generating annual production of approximately 18,000 tonnes of recoverable nickel by early 2010.  Continue Reading →

Xstrata Says Demand Collapsing, 686 Jobs Lost – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

The global economic meltdown is now biting Greater Sudbury. Gone for good are 686 full-time jobs at Xstrata Nickel, after the company announced a major restructuring of its Sudbury operations.

“Demand for our product has collapsed,” said Marc Boissonneault, vice-president Xstrata Nickel, Sudbury on CBC Radio One, Monday morning.
“We can’t carry on business as usual.”

As a result, the following will occur:
– 686 permanent employee positions will be made redundant, affecting both union (600) and salaried (86) employees;
– three-day shutdown will take place immediately to implement restructuring and talk to employees;
– 300 employees will be moved to the higher-value Nickel Rim project, displacing some contractors;
– Fraser Mine will be placed on care and maintenance for now;
– accelerated closure of Craig and Thayer-Lindsley operations;
– Strathcona Mill will be reduced from four shifts to two;
– Fraser Morgan development project will be deferred to be evaluated and possibly re-initiated.

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Rumours About Possible Mining Shutdown Circulating in Sudbury – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Rumours have been circulating in the city about the possible shutdown of major mining operations in the city.

At the present time, Northern Life has been unable to substantiate any shutdown by Vale Inco or Xstrata.

One rumour has it that Vale Inco will make an announcement next week about a four month shutdown starting March 1, 2009. The action would be for infrastructure improvements and repairs to key parts of the operation.

Angie Robson, manager of external relations for Vale Inco, said Friday the rumour has no basis in fact and is idle speculation.

“Our company has a policy that we do not comment on rumour or speculation,” said Robson.

John Fera, Local 6500 Steelworkers president, disputes the rumours, saying his sources told him Thursday night no shutdown was forthcoming at Vale Inco. He confirmed that for Northern Life Friday morning, after calling his source.
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Year In Review – Sudbury’s Economy: Boom to Bust? – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Greater Sudbury’s economy went from boom town status in 2008 to layoffs and growing fear in the community. Mining executives like Xstrata’s Mike Romaniuk, and Vale Inco’s Fred Stanford had been bullish on the future. “The world simply can’t get enough nickel,” said Stanford Feb. 6th at a Chamber of Commerce luncheon.

But by the early fall, a stock market crash started a series of layoffs in local mining companies and service and supply companies. Retired miner, Laurie Chartrand, 63, from Chelmsford, said he was down $25,000 from the stock market crash and knew some who had lost $200,000. He had a novel idea.

“We need the government to start a voucher system for those who have lost money like myself so we would have the ability to buy the cars that use our metals,” said Chartrand.

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Xstrata Copper Announces $121 Million New Investment in the Timmins Kidd Mine

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Ontario Mining Association member Xstrata Copper has announced a new $121 million investment to deepen and extend the projected operating life of the Kidd Mine in Timmins.  This investment will not only have a positive impact on the company´s future but also on the fortunes of its employees, suppliers and contactors, Timmins, Northern Ontario and the economy of the entire province. 

The Kidd Mine is the deepest base metal mine in the world.  This new project will expand the copper-zinc orebody´s mining zone from 9,100 feet below surface to 9,500 feet and extend the mine life to 2017.  This zone is estimated to contain 3.4 million tonnes of ore with a grade of 1.48% copper, 6.22% zinc and 80 grams of silver per tonne.

“The investment approval reflects Xstrata Copper´s commitment to the sustainability of Kidd Mine and the Timmins community and its business strategy to continually implement improvements to enhance the value of its operations,” said Claude Ferron, Chief Operating Officer for Xstrata Copper Canada.  Continue Reading →

China Demand Keeps Xstrata Business in Sudbury Booming – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Demand for nickel is booming and will continue to do so well into the future, said Mike Romaniuk, vice-president Ontario Operations, Xstrata Nickel. He was a speaker at a luncheon for the Rotary Club earlier this week at the Howard Johnson on Brady Street.

Close to $400 million is expected to be invested in Sudbury operations. In 2007, 300 workers were hired and another 400 are expected to join the company this year, said Romaniuk.

Why the good times?

In China, they are building the equivalent of a Greater Toronto Area city every year, he said.

“I was there three years ago and saw a sign in the dirt saying a new city of 15 million to be built at this site within three years. They did it. Cities like that require a lot of nickel in their infrastructure and consumer products. That’s why we are prospering,” said Romaniuk.

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Pollution Prevention Avoids Future Problems – (Digging Through the Sudbury Soils Study) – By Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Designing Out Trouble

(Final instalment of a four-part series) Sudbury Soils Study

Both Vale Inco and Xstrata have committed to being part of the solution and not the problem. They said that in a joint news release on May 13 after the release of the Sudbury Soil Study Human Risk Assessment.

The first necessity is better information about what emissions, such as dust, are being released.

Before the Sudbury Soils Study, the Ontario Ministry of Environment (MOE) conducted monitoring of air emissions at Nickel Street in Copper Cliff and Lisgar Street in Sudbury. In 2003, both companies agreed to fund an expanded air monitoring program, including samples of particulate matter (PM10) which is thought to be more relevant for inhalation into a persons’ lungs. In 10 locations, 20 monitors were set up. That data was used in the Sudbury Soil Study.

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