Steel Products Prices North America

Quebec Zinc Plant on Strike

February 20, 2017

Employees at a zinc processing facility in Quebec have gone on strike raising concerns for metal producers that use the alloy in galvanized steel.

CEZinc, in Salaberry-de-Valleyfield, Quebec is co-owned by Glencore and Noranda Income fund. Employees say the company demanded major pension concessions, despite an over-funded pension plan, and has rebuffed union suggestions for cost-cutting alternatives.

“We’ve been more than reasonable throughout the negotiations, but the employer isn’t interested in our proposals. They want a blank cheque for concessions,” said United Steelworkers Local 6486 President Manon Castonguay in a press release.

“On one hand Noranda Income Fund is making demands for serious concessions and on the other hand it refuses to put its cards on the table regarding the contracts it has negotiated with Glencore,” Castonguay said.

“Our plant is competitive, it has highly qualified workers and we’ve set new production records. We’re not going to accept concessions just to please a greedy employer.”

“This employer, Noranda Income Fund, has deliberately pushed us toward a labour dispute,” said Steelworkers staff representative Luc Julien, adding that the company has not provided any evidence of problems or financial trouble at the plant. The union and management have been engaged in labor negotations since November 2016.

Noranda responded that it will be operating under market terms beginning May 3, 2017.

“We have been preparing for market terms for some time, given the expected adverse impact on our financial results,” said Eva Carissimi, president and CEO of Canadian Electrolytic Zinc Limited. “Operating in a market term environment and in a tight zinc concentrate market makes it imperative that we explore all scenarios to lower expenses and improve plant safety and efficiency.”

The company said it remains committed to a new collective agreement that will allow operations on a profitable basis. Steps are being taken to resume partial production while the strike in in effect.

The CEZinc refinery is the largest zinc processing facility in eastern North America. Noranda is the refinery’s principal owner, while Glencore manages operations and owns a 25 per cent stake. CEZinc has annual production capacity of 265,00 tonnes, representing 17 percent of demand in Canada and the U.S. Half of the zinc ore that is processed is sourced from Quebec and Canada and the other half is imported. Seventy percent of CEZinc production is exported. The company also produces 400,000 tonnes of sulfuric acid annually.