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Gold/Mining/Energy : Copper - analysis -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (1294)	10/3/2005 6:38:39 PM
From: Stephen O	Read Replies (1) \| Respond to of 2131

Falconbridge May Not Fulfill Contracts During Strike 2005-10-03 14:00 (New York) By Jennifer Itzenson and Doug Alexander Oct. 3 (Bloomberg) -- Falconbridge Ltd., Canada's biggest mining company, said they may not be able to meet customer contracts at its Kidd Creek metallurgical operation near Timmins, Ontario, because of a strike with union workers. Toronto-based Falconbridge involved the ``force majeure'' clauses in supply contracts that allow the company to avoid penalties for failing to deliver products due to circumstances beyond its control, spokesman Ian Hamilton said today in a telephone interview. The company idled its Ontario copper refinery and zinc plant on Oct. 1 after negotiations for a new contract covering 615 union members broke down. The disruption helped push copper prices to a record high in New York. ``We're in process of advising that we are declaring force majeure on many of the plant's commercial contracts for its feed stream and its products,'' Hamilton said. Kidd Creek processes copper and zinc produced by Falconbridge and zinc concentrate from Agnico-Eagle Mines Ltd.'s LaRonde mine in Quebec. The operation was expected to produce 130,000 metric tons of refined copper and 135,000 tons of zinc this year, Falconbridge said in April. Shares of Falconbridge fell 21 cents to C$30.86 at 1:56 p.m. on the Toronto Stock Exchange. Falconbridge's 5 3/8 percent note maturing in June 2015 fell 0.85 cent on the dollar to 97.1 cents on the dollar, according to Trace, the bond price reporting system of the NASD. The yield rose to 5.777 percent from 5.66 percent. Copper futures for December delivery rose 3.15 cents, or 1.8 percent, to $1.759 a pound on the Comex division of the New York Mercantile Exchange, the highest closing price ever. Copper has jumped 26 percent in the past year. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date. There are currently no talks planned with the union, Hamilton said. ``We are implementing contingency plans to do what we can to meet customer needs,'' he said. ``But given that we don't know how long this strike may last, we wanted to act prudently by declaring this force majeure where it's applicable.'' --Editor: Stroth.