428 Noranda Mines Ltd Canada's largest "natural resources group" (1), in 1982 Noranda secured the most detailed entry of any company in the Financial Times Mining International Yearbook. The company's operations were divided into three main divisions: mining and metallurgy; manufacturing; and forest products (3). Due to expansion in 1982, the company's metals division was itself reorganised into four new groups (4), including Energy.
The contemporary Noranda was formed in 1954 with the merger of Noranda and Geco mines. Originally the company worked a number of mining claims in Ontario and Quebec. Between the '20s and '30s Noranda integrated "downstream" into smelting and fabrication. Horizontal integration - almost exclusively in Canada - continued through the following two decades. The only foreign venture during those years was a gold mine in Nicaragua (3).
In 1953, Tara Mines (41%) was incorporated in Ontario to explore for minerals and start mining in Eire. For a long time this was the company's major overseas project (5).
Ten years later, a number of mines were merged to become Kerr Addison Mines Ltd, owners of the ill-fated Agnew Lake mine (3). Kerr Addison itself owns 75% of Mogul of Ireland (not to be confused with International Mogul Mines).
At home, in Canada, the company's activities range far and wide, taking in lumber, pulp, newsprint, and the huge coastal timber holdings of MacMillan Bloedel, Canada's largest forest products group. Noranda acquired Macmillan Bloedel in 1981 (5) after a bloodless takeover bid of 49.8%, thus raising speculation at the time that a bigger giant might bid for Noranda itself.
Copper rods, wire, cables, fibre optics, medical instruments, plastic pipes, spew forth from Canada Wire and Cable, a manufacturing subsidiary; while steel wire rope, slings strands, nets - everything you could fish for - come from Wire Rope Industries; and aluminium products deriving from a part-owned mine (Friguia, 20%) in Guinea (6).
Noranda's major Canadian mining affiliates and subsidiaries include: Brenda Mines (51%) - copper and molybdenum; Brunswick Mining and Smelting Corp Ltd (63%); Central Canada Potash; Heath Steele Mines (75% JV); Pamour Porcupine Mines (49%) - copper, silver, gold; Kerr Addison Mines (51%); Hemlo Gold Mines Inc (50.1%); and Falconbridge (with Trelleborg AB) acquired in 1989 (62).
In 1987 Noranda acquired a 35% interest in Norcen Energy Resources (63) which it later raised to 48% (64).
Up until 1980 things looked rosy for Noranda. It reopened several mines in Canada (7, 8, 9), expanded its Boss Mountain molybdenum mine in British Columbia (10), and its Norandex Inc American unit acquired substantial property assets in a subsidiary of Revere Copper and Brass Inc (11). Work was begun on the massive Goldstream copper-zinc sulphide deposit in British Columbia (12). A lease was also signed with the Papago Native American tribal council of Arizona to allow the Lakeshore copper mine to reopen (13). Formerly owned by Hecla Mining and El Paso Natural Gas, Lakeshore is a large, but low grade, copper deposit which stopped production in 1977 in the face of low prices. Initial development costs agreed between Noranda and the Papago were set at US$1.64M (7).
Noranda's sales were the highest for any Canadian mining company in 1979 (14), marking an expansive phase by the company (15), especially in Canada, Chile and Australia (7) - more about the latter two, later.
The next year, the company bought out the Maclaren Power and Paper company (16) and Noranda's Canadian Hunter Exploration - its oil and gas unit - won the exclusive right to drill over almost 2 million hectares in the Nechako Basin of central British Columbia (17).
Within two years, however, Noranda sustained its first ever loss after a "devastating period for producers of basic materials" (3). There were strikes in British Columbia and at the Tara mines (18), and a number of mines and projects were closed (3) or cut (19).
Meanwhile, it had abandoned its stake in the Andacollo copper mine in Chile's Elqui province, a project launched in 1976 with Noranda holding 49% of the share interest and the Chilean government (through its agency Enami/Empresa Nacional de Minera) the other 51%. Both Noranda and the Chilean junta had failed to find financing for the 70,000 tonnes/year project on terms acceptable to both of them (20). Noranda was reimbursed with. US$4.8M from the Chilean coffers, in addition to a slightly smaller amount already provided (21) . Noranda's withdrawal helped prompt Chile into framing a new "mining code" which opened the doors even wider to foreign encroachment on Chilean land (20).
Early 1983 brought little comfort for the company as its first quarter results proved "totally unsatisfactory" (22).
However, by then, the Golden Giant gold deposit in the newly located gold-rush district of Hemlo, north-west Ontario (see also Teck) had been drilled, proving at least eight million tons of ore reserves (23). This find could make Noranda "the biggest gold producer in Canada" (24). Noranda is also linked with Teck in exploration of another property in the Hemlo area (25). (A new gold zone was defined at Hemlo in 1984) (26).
By late 1984, Noranda was still running at a loss (27): five of its copper mines in Canada were closed, and a sixth on the point of closure (28), the Brenda mine among them. And, in the first half of 1984, it had written down the value of some of its properties by C$65.6M, while selling some of its assets in Placer Development (26). Three gold mines in the Pamour Porcupine group were suspended (29) and, by the end of 1984, Noranda was reporting a slide downhill for most of its products (30).
On other fronts, the company's fortunes were a little better assured. In the 1980s, it signed a contract with the Guyanese government to open a gold project at Marudi in the Essequibo region of the country (31); re-entered gold mining at the Nabesna mine in eastern Alaska, and upped its reserves at its multi-mineral deposit at Green's Creek on Admiralty Island (32); signed a contract with the Chilean regime that resolved "past differences" and re-opened the door to Noranda (33); and concluded a JV agreement with the Robertson Research affiliate, Greenwich Resources, to carry out exploration and open mining projects in the USA: 38 properties were being examined in Nevada, Alaska, Missouri, Colorado and Idaho, and Greenwich could earn 27.5% in Noranda's programme (34).
In 1984 a Brazilian 50%-affiliate of Noranda, called Dunbras Eluma SA, started gold production in the Alta Foresta area of northern Mato Grosso (35). This is an indigenous area that comprises part of the massive Carajas project area. Eluma Metais SA (in which Noranda has 30%) was also trying to site a smelter at Sao Luis de Maranhao to take ore from the Salobo deposit (26).
Criticisms of Noranda have a long pedigree.
In the late '70s, the Saskatchewan government took steps to take over at least half the province's potash industry. Noranda- through its 51% Central Canada Potash - being a major beneficiary of the status quo, vehemently objected. Its chairman Alfred Powis called the Blakeney government "a mafia", and another Noranda representative spoke of the decision as "immoral", "dishonest" and "fruitless" (36). Powis left no doubts as to his company's "morality" in a statement made to the Financial Times of Canada in 1975:
"In recent years we have become altogether too preoccupied with the redistribution of wealth to the exclusion of its creation. The result is too much consumption and not enough investment ..." (37).
Some years later, another Noranda subsidiary, Canadian Hunter, attacked the federal Canadian government in similar vein for a budget and energy programme which restricted exploitation of some of its new gas discoveries in western Canada (38).
Noranda's Zapata Mining (Pty) Ltd subsidiary also had an interest in the Onganja copper mine in Namibia, thus contravening UN Decree No. 1 on Namibia (39).
Noranda has recently entered the acid rain controversy in a novel fashion: producing research which purports to show that nitrogen oxides are at least as deadly as sulphur dioxide. As Canada's largest metallurgical acid producer, its research may be construed by many as somewhat tainted. In a five-year analysis of pH (acidity/alkalinity) in 60 lakes down-wind of its large Horne copper smelter in north-west Quebec, Noranda found "no change in pH over the five year period" (40). Since Horne produces some 463,000 tons/year of sulphur dioxide, objective observers may be a little incredulous about the value of Noranda's research.
An attempt to use asbestos tailings (sic) to "scrub" Horne's emissions proved "too costly", while producing phosphoric acid - then fertilizer - as another means of control foundered on the over-supplied fertilizer market.
Meanwhile, Noranda warned the increasingly vocal environmental lobby that, if it carried on criticising, Horne might have to close, and employment would suffer (41).
Indeed, new controls brought in by the Quebec government to limit acid rain pollution meant that the Horne smelter would have to reduce its emissions by no less than 50%. Violation will mean fines of up to C$100,000 per day and prison terms of up to 6 months (42). In 1988, Noranda constructed a new sulphuric acid plant at Horne, to comply with the stricter standards (62).
In the late '70s, Al Gedicks, of the Center for Alternative Mining Development Policy (Wisconsin), accused Noranda of concealing the possibility that it had located a large uranium deposit in the state, by refusing to comply with state law which requires mining companies to file non-interpretative field reports. Noranda won a court case, claiming that the law "violates corporate confidentiality" (43).
The company has, perhaps, a more modest reputation for encroachment on native peoples' lands than most other corporate bodies of its size. Along with Exxon, Kerr-McGee, and Getty Oil, it has for, some time, been eyeing Oneida Indian land in the Canadian Shield area of Wisconsin. In 1976 it signed an agreement with Gulf Minerals (see Eldor Resources) to explore for uranium near Rabbit Lake and, with the British CEGB, to explore for uranium between Rabbit and Key Lake, in north Saskatchewan, along with the SMDC (44). In 1974 it also explored for uranium with Thor at La Ronge, Duddridge Lake, Saskatchewan (45).
However, its major foray into yellowcake has been half a world away, in Australia's Northern Territory.
Noranda "owned" the Koongarra uranium deposit in Arnhemland before the 1976 Aboriginal Land Rights Act came into force, and failed to apply for exemption of their deposit from Aboriginal claims (46). What's more, the virtually blanket condemnation of the company's plans by the Fox Commission ensured that it had to "revamp" its project considerably. In what the Australian Financial Review appropriately called a "bid to outflank Fox" (47), Noranda re-designed and upgraded its tailings pond system, relocated its plant site, and incorporated a facility to neutralise the acidity of the tailings (48).
A supposed "no release" water system was also planned, to prevent seepage into the Nourlangie creek, and drainage into the wild, unspoiled Woolwonga wetlands (49). Noranda expected to begin production in 1981 (50).
Hardly a year passed, however, before Noranda was dumping Koongarra on the market: Denison picked it up for about C$47M (most of which was for forward production) (51). The company said it needed the sale in order to keep its profits at the 1979 level (52).
Who controls Noranda?
The two major financial controlling interests in Noranda over the last decade have been Zinor Holdings and Brascade Resources (an affiliate of Brascan, formed in 1981 with C de D & P Quebec) (53).
In 1979, Zinor Holdings held 21.2% share interest in Noranda, after a share issue of 14 million Noranda shares was taken up by Zinor, then controlled by Kerr Addison, Placer Development, and Frenwick Holdings. A few months later, Brenda Mines and Brunswick Mining and Smelting (companies partly controlled by Noranda), bought just under 80% of Frenwick Holdings, thus giving them a small share of Noranda itself (2).
However, in 1981, Zinor and Frenwick Holdings were both liquidated and their share in Noranda sold to Brascade (54). Brenda received nearly 3 million common shares of Kerr Addison and over 3.5 million preferred shares of Brascade Resources as a result. And, so did Brunswick Mining and Smelting (55). This came soon after Noranda's chairman Powis, and two other Noranda executives, were accused by the Ontario Securities Commission of violating securities laws by selling Noranda shares in 1981. at a time Brascade was bidding to control Noranda (56).
Brascan/Brascade's interest in Noranda was 10.9% in 1979 (57), and it made no secret of its desire to control the company (58). In August 1981 it agreed to increase its interest in Noranda from 22% to about 37%, at a cost of over a billion Canadian dollars (59): it also agreed to keep its Noranda holding below 50% while its nominees to the Noranda board would constitute less than a majority (59).
In the late '70s, Noranda joined a JV with Lacana, and E & B Explorations, to search for uranium in New Brunswick, Canada (60).
Noranda is also a partner (12%) in the Kennecott deep sea consortium controlled by RTZ (directly, and through Kennecott) with Mitsubishi and CGF (61).
Noranda's express intention in the late 'eighties was to become "the premier diversified natural resource company in the world" (65). Its diversifications from 1988 to 1991 certainly reduced its dependency on any single metal: by early 1991, it had re-entered and had new ventures in Chile (17% of the Collahuasi copper project), Newfoundland, Quebec, Montana, and Ontario. But its 1990 results were poor (66) . In April the following year, it announced a sale of some C$500 million of its assets (67). On top of this, it offered all its gold holdings to Hemlo Gold, in exchange for more than eight million Hemlo shares (68).
Its renewed prospecting on Oneida land in northern Wisconsin at this time brought it into head-on conflict with Native Americans and a variety of environmental groups (69).
Contact: Latin American Working Group, Box 2207, Station P, Toronto, Ontario M5S 2T2, Canada.
One Sky Cross-Cultural Center, 134 Avenue F South, Saskatoon, Saskatchewan S7M 1S8, Canada (who maintain an information file on Noranda).
Centre for Alternative Mining Development Policy, 210 Avon Street 9, La Crosse, Wisconsin 54603, USA.
Further reading: "Noranda Who?" by Monika Buaerlein in Shepherd Express, Milwaukee, 1320/6/91. (This succinctly outlines Noranda's environmental record - from MacMillan Bloedel's plans to clearcut rainforest on Vancouver Island; via a huge outflow of dioxins from the same subsidiary's paper mill at Port Alberni, British Columbia; to the sordid history of Noranda's violations of sulphur dioxide limits at its Horne smelter, which resulted in 117 children being diagnosed with high levels of lead in their blood by late 1989. It is also worthy of note that - as this book details - in August 1989 Noranda had to contribute to clean-up costs of the Serpent River [Indian] Reservation in Canada, after 9000 truckloads of contaminated soil from irs sulphuric acid plant had been dumped on the lake shore at Curler; see also Rio Algom.)
SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.
Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.
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