1-inco may shut copper plant, union threatens "war

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    -Inco may shut copper plant, union threatens "war"


    VANCOUVER, British Columbia, May 5 (Reuters) - Inco Ltd.'s (N.TO: Quote, Profile, Research) biggest labor union threatened "war" on Thursday if the Canadian miner shuts a copper refinery in northern Ontario that Inco says is old, small and expensive to run.

    Wayne Fraser, a spokesman for the United Steelworkers of America, warned of tense labor negotiations later this year if Inco goes ahead with a possible plan to close down the Copper Cliff processing plant in Sudbury.

    "They're actually declaring war on us if they make this decision. And a war is what they'll get," Fraser told Reuters.

    Although talks on a new labor contract at the Sudbury site are a year away, an agreement with production staff at Inco's Thompson, Manitoba, operations expires in September. Unionized workers at that site are also Steelworkers' members.

    Inco is the world's second biggest nickel producer but also mines some copper. Like other miners, it has suffered from escalating costs but has of late also been enjoying the highest metal prices in more than a decade.

    Inco spokesman Cory McPhee said the firm hopes to decide in the "next month or so" whether to close the Copper Cliff refinery, which, because of its age and size is a higher-cost processing plant than those in other parts of the world.

    Metal refining would be outsourced to a third-party but the Sudbury site would continue to mine and smelt copper.

    The 70-year-old refinery has 140 employees, who McPhee said would not lose their jobs but would be offered work in Inco's other Sudbury operations.

    Fraser said Inco was loath to spend money to upgrade the plant at a time when it needs cash to complete its biggest nickel expansion yet. The company is building two very large nickel mines, one at the Voisey's Bay site on Canada's east coast and another on New Caledonia in the South Pacific.

    McPhee said Inco has been reviewing closing Copper Cliff for a year. The plant produces about 115,000 tonnes of finished metal a year, which is much less than the 350,000 to 500,000 tonnes that refineries on average produce, McPhee said.

    He would not say how much it cost Inco to produce a pound of refined nickel at the operation.

    Workers at the Thompson, Manitoba, site last went on strike in September 1999 for 12 weeks. The 2002 collective agreement was negotiated without incident.

    Inco's stock closed down 5 Canadian cents at C$45.35 on the Toronto Stock Exchange on Thursday.

    ($1=$1.24 Canadian)

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