Noranda Hopes to Restart Negotiations with Union

Noranda Inc. has met with met with representatives from Le syndicat des travailleurs de la Mine Noranda, representing employees at its Horne smelter who have been on strike since June 18th, 2002. In its meeting, Noranda informed the union that it would need to eliminate 125 unionized positions at the smelter.

"In order for Noranda to make the Horne profitable over the mid and long-term, we need to take the necessary measures to reduce our overall operating costs in all sectors of the operation including reducing manpower levels.

The smelter's profitability will be impacted in 2003 by the exceptionally low treatment charges for copper, the Horne's main source of revenue, as well as from the reduction of concentrates coming from local sources in the region", said Mario Chapados, general manager of the Horne Smelter. "Noranda would like to work in co-operation with the union to minimize the impacts caused by the manpower reductions announced today."

Since the beginning of the strike, treatment charges for copper concentrate have fallen by 15 percent and treatment charges are 20 percent lower in 2003 than what was received in 2001. Noranda is also committed to improving revenues at the Horne smelter. As such, Noranda is planning to invest in a new recycling facility in Canada that is dedicated to providing the Horne smelter with a new source of recyclable materials.

According to a spokesman for the company, the proposed recycling facility will be geared toward handling used electronics. The site, not yet announced, will be similar to the two existing facilities the company presently operates in the United States.

The company also is planning to invest $10.3 million in exploration activities aimed at finding new copper-zinc deposits in Quebec. This investment is the result of a new exploration incentive program recently announced by the government of Quebec.

"With Noranda's loss of $700 million in 2002, along with an operating loss of $112 million for the Canadian Copper and Recycling business unit, Noranda needs to take the necessary short-term measures to return all of its business units to profitability," said Claude Ferron, vice president and general manager for the Horne smelter and CCR refinery. "The Horne smelter is definitely a quality asset that can contribute to Noranda's profitability if it is able to reduce its operating costs and improve its economics." …