Premier McGuinty Urged to Prevent Closure of Xstrata Met Site

TORONTO, April 9 /CNW/ - The Ontario government will set a dangerous precedent if it allows foreign mining giant Xstrata to close its high value-added Kidd Creek Met site and simply mine raw materials in Timmins, Ontario, CAW President Ken Lewenza says.

If Xstrata is allowed to close its Metallurgical site this summer costing 670 direct jobs and more than 4,400 indirect jobs, it will be a serious step backward for the province, Lewenza told Premier Dalton McGuinty at an April 8 meeting.

Lewenza urged McGuinty to ensure the highly profitable company continues to provide high value-added jobs at the Met site if it wants to continue extracting Ontario mineral resources.

A coalition of Northern Ontario Mayors, regional politicians and union representatives met with McGuinty at Queen's Park April 8 to urge a halt to the closure of the Xstrata Metallurgical site. CAW Local 599 represents workers at the Met site.

    Here is a summary of other points raised by Lewenza:

    -   Foreign mining giant Xstrata continues to make huge profits. "What
        the company digs out of the ground and processes in Timmins has a
        market value of some $1.6 billion per year - we know these operations
        are highly profitable. This is not about a company losing money and
        pulling back;"

    -   Smelters are needed to turn raw materials into metal. "Even at a time
        when metals companies are raking it in, smelting is not going to be
        the highest profit centre. But, critically, smelting is where we see
        the most value-added jobs, high tech investment and the greatest
        economic spin-off;"

    -   Xstrata makes profits from mining and smelting. Xstrata's own
        forecasts show it expects healthy profits from both sides of its
        operations - 85 per cent from the mine and 15 per cent from the
        smelter. "If a company makes hundreds of millions in profits from
        mining, but not as much on smelting, should they be allowed to simply
        close the smelter?"

    -   Contrary to claims there are not enough raw materials to keep the Met
        site running, the fact is just the opposite. "Very soon we will be in
        a position of exporting raw materials out of Canada, which is against
        even the lax rules under the current Ontario Mining Act."

    -   The closure will devastate the community. "The economic impact,
        calculated by independent researchers, shows that for every job lost
        in the Timmins area, another three jobs are expected to be lost
        elsewhere in Ontario, bringing the total job loss above 4,400." In
        addition, the closure of the Met site means the loss of $152 million
        in tax revenue annually.

    -   Ontario has the power to enforce change. "Even under the current
        Mining Act, which should be toughened up, the Ontario government has
        the power to insist on refining and processing in Canada and to
        approve new licences...we must send a signal that Ontario will insist
        on value-added jobs as part of the exchange for access to our

SOURCE Canadian Auto Workers Union (CAW)

For further information: For further information: CAW Communications, Shannon Devine, cell, (416) 302-1699, or John McClyment, cell, (416) 315-3202

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