PROPOSED CLOSURE OF NORTHFLEET’S RECYCLING OPERATION
Madrid, Friday 5 September 2003
Britannia Refined Metals Limited (“BRM”), a wholly owned subsidiary of Xstrata Zinc, has put a proposal to its employees and trade unions to close its recycling operation at Northfleet in the United Kingdom at the end of the year. This proposal will be the subject of a consultation period of at least 30 days.
As a result of the proposed closure, about one third of the Northfleet workforce of 250 may be made redundant, and consultation with employees and unions has already begun.
Santiago Zaldumbide, chief executive of Xstrata Zinc, said, “In the due diligence and integration processes entered into as part of the acquisition of MIM, Xstrata identified a number of initiatives to optimise the lead business of the former MIM. The recycling operation at BRM has achieved only marginal profitability at best over the last several years and it is now at a point where future investment is required but impossible to justify. To secure the ongoing profitability of BRM, we therefore propose to close down the recycling line. BRM will meet all its 2003 contractual obligations and, wherever possible, will assist customers affected by the closure to source supply from other producers for 2004.”
As a consequence of the fair value exercise undertaken on the assets as part of the acquisition of the MIM Group, the net book value of BRM’s recycling operation is zero. Closure costs for the operation are estimated at some US$5-$8 million, including costs for redundancy, decommissioning and site cleanup. There are no further environmental exposures.
With the closure of the second line in March 2003 and the proposed closure of the recycling line, BRM would comprise a single lead refining operation that would continue to process crude lead from Xstrata’s Mount Isa mine in Australia.
ends
Xstrata contacts
Alan Breen
General Manager
Britannia Refined Metals Limited
Telephone +44 1474 538 202
Marc Gonsalves
Telephone: +44 20 7968 2812
Mobile: +44 7775 662 348
Email: mgonsalves@xstrata.com
Note for Editors:
BRM is a wholly owned subsidiary of Xstrata Zinc which refines crude lead received from Xstrata’s Australian lead smelting operation at Mount Isa and the Duisburg smelter in Germany. In 2002, BRM produced some 250,000 tonnes of refined lead and alloys, 36,000 tonnes of which came from the recycling operation,. as well as almost 15 million ounces of silver. The refinery also produces by products for sale.