Falconbridge Ltd.
From Wikipedia, the free encyclopedia
| Falconbridge Limited | |
 |
|
| Type of Company | Public (FAL) |
|---|---|
| Founded | (1928) |
| Headquarters | Toronto, Ontario, Canada |
| Key people | David W. Kerr, Chairman, Derek Pannell, CEO |
| Industry | Mining |
| Products | Copper, nickel, zinc, aluminium |
| Revenue |  $6.9 billion USD (2005) |
| Employees | 20,000 (2005) |
| Website | www.falconbridge.com/ |
Falconbridge Limited TSX: FAL NYSE: FAL was a Toronto, Ontario-based natural resources company with operations in 18 countries, involved in the exploration, mining, processing, and marketing of metal and mineral products, including nickel, copper, cobalt, and platinum. In August 2006, it was absorbed by Swiss-based Xstrata Plc, which had formerly been a major shareholder.
Falconbridge was an important player in the economic and commercial development of the northern region of Ontario, Canada, particularly the communities of Greater Sudbury.
Contents |
[edit] History
Experienced prospector and businessman Thayer Lindsley purchased mining claims northeast of Sudbury in 1928, forming the basis of Falconbridge Nickel Mines Limited[1]. Soon thereafter, planning and construction commenced of a company town to house and service workers in the mines to be constructed to harvest rich deposits of nickel-copper ore in the area[2]. The community, complete with utilities and a medical centre, would be named Falconbridge after the company.
As soon as the next year, the new company acquired the Nikkelverk refinery in Kristiansand, Norway, expanding its operations, but also and importantly, the Hybinette nickel refining process.
The operations at the Falconbridge site expanded into the early 1930s. By 1930 ore from an underground mine was being extracted at 250 tonnes per day, and a nearby smelter was in operation to process the material. In 1932, a mill and sintering facility began operation.
Through the 1950s and '60s, significant expansion of the Sudbury Basin operations took place, including some twelve new mines. All recovered nickel, copper, and smaller amounts of other materials including platinides. The Nikkelverk operation began recovering cobalt alongside previous extractions in 1952, using a new refining process. In 1962, Falconbridge acquired Ventures Limited, including its numerous international operations and geological exploration infrastructure, allowing further expansion and growth outside of Canada.
The late 1970s saw the company play a role, alongside INCO, in the environmental reclamation efforts undertaken in the Sudbury region. As part of this, a new, more efficient smelter was opened, as well as a facility for the production of sulphuric acid. This commercially saleable chemical had been a source of significant ecological damage when it was produced in the atmosphere by the reaction of smelter emissions. The new acid plant allowed this effect to be greatly reduced by catalyzing the reaction before emission, while producing additional revenue from the sale of the acid.
In 1979, Falconbridge patented the chlorine leach nickel refining process that had been developed in-house.
By 1984, the commercial reserves at the original Falconbridge Mine had been exhausted. Production contnued at several other sites in the Sudbury area. The company expanded within northern Ontario by acquiring the Kidd Creek mine in Timmins, Ontario. Expansion continued in the 1990s, with a new mine in Sudbury, and one at Raglan in northern Quebec, though it lost the bidding war with INCO for the deposity at Voisey's Bay, Labrador[3]. The new century saw more mine openings, in Timmins and Tanzania, and acquisitions in Chile.
In June 2005 it merged with Noranda Inc., previously the 58.9% owner, continuing under the name Falconbridge. The Noranda branch brought significant variety to the business, including operations in aluminum mining and recycling of electronic hardware.
[edit] Operations at the time of Xstrata acquisition
Falconbridge had major operations in and around the Sudbury Basin, including the Craig, Fraser, and Thayer Lindsley underground copper/nickel mines, as well as a mill (Strathcona), nickel smelter, sulphuric acid plant, and a technology centre (FTC). In 2005, Falconbridge started the Deposit Definition phase of the Nickel Rim South mine near the Sudbury Airport. Shaft sinking for Nickel Rim South is scheduled to be complete by 2008.
Metal refining was no longer carried out in Sudbury by Falconbridge, but rather at its Falconbridge Nikkelverk operation in Kristiansand, Norway.
Another Canadian operation was the Kidd Creek site in Timmins, Ontario which includes an underground zinc/copper mine, mill, copper smelter and copper refinery, zinc plant, indium plant, cadmium plant, and sulphuric acid plants. Falconbridge also operated the Montcalm underground nickel mine west of Timmins, Ontario. Other sites were located in Quebec, Ontario (Rouyn-Noranda: Horne copper smelter, Montreal: CCR copper refinery, Valleyfield: CEZ zinc refinery, Nunavik: Raglan underground nickel/copper mine and mill) and Bathurst, New Brunswick (Brunswick underground zinc/lead mine, lead smelter and lead refinery, and silver refinery).
Copper and precious metal recycling facilities were at Brampton, Ontario; East Providence, Rhode Island; La Vergne, Tennessee; Roseville, California; San Jose, California; and Penang, Malaysia.
Falconbridge Ltd. also operated an aluminum smelter in New Madrid, Missouri and an aluminum refinery in Gramercy, Louisiana. The aluminum produced from these mills was prepared in one of four rolling mills located in Huntingdon, Tennessee (2 mills); Salisbury, North Carolina (1 mill); and Newport, Arkansas (1 mill).
Central American and Caribbean projects included the St. Ann bauxite mine in Discovery Bay, Jamaica and the Falcondo nickel surface mine and processing plant in Bonao, Dominican Republic.
South American properties were mainly copper deposits such the Antamina copper/zinc open-pit mine in northern Peru, the Collahuasi copper/molybdenum open-pit mine (including mill, solvent extraction plant, and electrowinning plant) in northern Chile, the Lomas Bayas open-pit copper mine (including solvent extraction plant and electrowinning plant), and the Altonorte copper smelter also in northern Chile.
[edit] Merger efforts and acquisition
On October 11, 2005, Inco Limited announced a proposal to acquire Falconbridge for $12 billion. This came at a time of especially high prices for base metals, including nickel. Part of the motivation for the merger was to avoid a takeover by either company by cash-flushed foreign competitors. Additionally, significant synergies would have been realized in the Sudbury operations, with both companies performing the same kind of extraction and smelting work on the same kind of ore.
The two companies were set upon by hostile takeover bids from rival firms. Swiss Xstrata, already 19.9% owner of Falconbridge, bid for a complete acquisition, while Teck Cominco, of Vancouver, set its sights on INCO.
On May 13, 2006, Inco Limited announced that it increased its offer to acquire Falconbridge by CA$5.00 per share, bringing the bid to CA$61.04 per share (based on the June 23, 2006 Inco/Phelps Dodge share price).
On June 26, 2006,Phelps Dodge made a bid for the proposed combined Inco/Falconbridge company, valued at around US$40 billion. This would form the Phelps Dodge Inco Corp. valued at US$56 billion, creating the fifth largest mining company, largest nickel producer, and the second largest copper producer in the world with corporate and copper division headquarters located in Phoenix, Arizona and nickel division headquarters in Toronto, Ontario. The deadline for the Inco offer was July 13, 2006.
On May 18, 2006, Xstrata had announced a proposal to acquire Falconbridge for CA$52.50 per share. This was a cash offer, unlike the Inco offer of a combination of cash and shares. On July 12, 2006, Xstrata announced that it increased its offer to acquire Falconbridge to CA$59.00 per share (an approximate total value of CA$22.5 billion). This counter-offer was 9.6% higher than Inco's bid. The deadline for Xstrata's bid to be complete was July 21, 2006. Xstrata acquired and absorbed Falconbridge in late August 2006, leaving INCO open to bids by Phelps Dodge and the Brazilian Companhia Vale do Rio Doce[4].
[edit] Social impact in Sudbury
Falconbridge lent its name to the company town northeast of Sudbury, which grew to be a community in its own right. The town of Falconbridge was incorporated by the provincial government in 1957[5]. It was organized along with several other communities into the Town of Nickel Centre and Regional Municipality of Sudbury in 1973. Some Falconbridge workers also lived in the nearby community of Happy Valley, which was abandoned in the 1960s due to pollution from the Falconbridge smelter.
"Falco", as it was often called by Sudbury residents, remained for decades the second-largest employer in the Sudbury area, exceeded only by rival mining giant INCO. The economic fortune of the city was tied to those of the mining companies; a strike at either had a major effect on the local economy and the livelihood of the population, involving thousands of workers in the major industry of the town. The effect diminished as economic diversification progressed in the 1980s and 1990s.
Citizens, particularly workers and their families, came to develop an attachment to what were seen as local companies with significant size and influence in the mining industry. In particular, a certain degree of rivalry between workers at the two mining giants, who were members of rival trade unions, developed. A proposal to merge the INCO and Falconbridge in 2006 was heade with a slogan "Two proud histories, one great future[6]", in reference to the strong identities which workers and the community had attached to the companies.
A major street in Sudbury is named Falconbridge Road, after the company and community.
[edit] External link
- Official site, now moved to Xstrata archive
