Operating at 25 per cent normal capacity: Company
MONTREAL (Reuters) — The union representing striking workers at the Noranda Income Fund's zinc processing facility in Quebec, vowed on Thursday to take the company to court over the alleged use of strikebreakers.
"We have amassed significant evidence of illegal work by scabs and our lawyers are on the case," Luc Julien, a union representative at United Steelworkers of America Local 6486, which is leading the strike, said in a statement.
The statement said the union will bring a case against the company to court within the next few days.
A company executive said by phone that it respects Quebec's labour code. But it aims to boost production at the plant, the biggest zinc processing facility in eastern North America, using "eligible" staff like managers as the strike nears four weeks.
"We're very much focused on operating the plant and ramping up production," said Eva Carissimi, president and chief executive of Canadian Electrolytic Zinc, the fund's manager.
She declined to specify the plant's current volume, but the union said on Wednesday it was likely producing below 25 per cent of normal capacity.
The market is watching the strike as zinc prices have more than doubled since the beginning of last year due to a shortage tied to mine closures and shutdowns.
The dispute with the plant's 370 workers, who walked off the job on Feb. 12, hinges on cuts being made in preparation for a change this year in an arrangement with Glencore Canada that is expected to boost expenses, Carissimi said. Glencore indirectly owns 25 per cent of the fund and acts as the smelter's commercial agent.
The deal with Glencore insulates Noranda from market fluctuations in the treatment charges paid to smelters which transform zinc concentrate into a sellable product. But when the arrangement ends in May, Noranda will be exposed to changes in the charges it earns as revenues for processing and refining concentrate, that are now near historic lows.
"Our whole economics change," Carissimi said. "We are like every other smelter that has to adapt."
Labour currently accounts for 35 per cent of costs, with the company's defined benefit plan an important contributor.
Carissimi said the fund has asked employees to contribute to the plan, which is now fully covered by the company. Noranda also wants to raise the eligible age for voluntary early retirement to 60 years, from 58 years with 32 years of company service.
