Falconbridge Nickel Mines

Falconbridge Nickel Mines Limited, and from 1982 onwards Falconbridge Limited, was a Canadian mining company that existed from 1928 to 2007. It had operations in 18 countries, and was involved in the exploration, mining, processing, and marketing of metal and mineral products, including nickel, copper, cobalt, and platinum. It was listed on the TSX (under the symbol FAL.LV) and NYSE (FAL), and had revenue of US$6.9 billion in 2005. In August 2006, it was absorbed by Swiss-based mining company Xstrata, which had formerly been a major shareholder. On 28 October 2007, Falconbridge Limited changed its name to the Xstrata Canada Corporation.[1]

Falconbridge, named after the town Falconbridge, which in turn was named for a prominent "son", one Sir William Glenholme Falconbridge, High Court Judge whose father John Kennedy Falconbridge, had migrated to Ontario from Lisburn Ireland.

Falconbridge is important to the economic and commercial development of the northern region of Ontario Canada, particularly the communities in and around Sudbury.

History

In 1928, an experienced prospector and businessman Thayer Lindsley purchased mining claims containing rich deposits of nickel-copper ore in the area northeast of Sudbury.

Operations as of 2006

At the time of the Xstrata takeover, Falconbridge had major operations in and around the Sudbury Basin, including the Craig, Fraser, and Thayer Lindsley underground copper/nickel mines, as well as a mill (Strathcona), nickel smelter, sulfuric acid plant, and a technology centre. In 2005, Falconbridge had started the Deposit Definition phase of the Nickel Rim South mine near the Sudbury Airport.

Metal refining was no longer carried out in Sudbury by Falconbridge, but rather at its Falconbridge Nikkelverk operation in Kristiansand.

Another Canadian operation was the Kidd Mine and Kidd Metallurgical Site in Timmins, Ontario which includes an underground copper/zinc mine, concentrator, copper smelter and copper refinery, zinc plant, indium plant, cadmium plant, and sulfuric acid plants. Falconbridge also operated the Montcalm underground nickel mine west of Timmins. Other sites were located in Quebec, Ontario (Rouyn-Noranda: Horne copper smelter, Montreal: CCR copper refinery, Salaberry-de-Valleyfield: CEZ zinc refinery, Nunavik: Raglan underground nickel/copper mine and mill) and Bathurst, New Brunswick (Brunswick underground zinc/lead mine, lead smelter and lead refinery, and silver refinery).

Copper and precious metal recycling facilities were at Brampton, Ontario; East Providence, Rhode Island; La Vergne, Tennessee; Roseville, California; San Jose, California; and Penang, Malaysia.

Falconbridge Ltd. also operated an aluminium smelter in New Madrid, Missouri and an alumina refinery in Gramercy, Louisiana. The aluminum produced from these mills was prepared in one of four rolling mills located in Huntingdon, Tennessee (2 mills); Salisbury, North Carolina (1 mill); and Newport, Arkansas (1 mill).

Central American and Caribbean projects included the St. Ann bauxite mine in Discovery Bay, Jamaica and the Falcondo nickel surface mine and processing plant in Bonao, Dominican Republic.

South American properties were mainly copper deposits such as the Antamina copper/zinc open-pit mine in northern Peru, the Collahuasi copper/molybdenum open-pit mine (including mill, liquid–liquid extraction plant, and electrowinning plant) in northern Chile, the Lomas Bayas open-pit copper mine (including liquid–liquid extraction plant and electrowinning plant), and the Altonorte copper smelter also in northern Chile.

Falconbridge also owned a Boeing 737-200 (registration C-FFAL). The aircraft is based in Toronto at Pearson International Airport. The aircraft was repainted with Xstrata livery following the takeover, and still operates.

Merger efforts and acquisition

In 1996, as part of a strategic initiative - growth study, internally commissioned during the struggle between INCO and Falconbridge over acquiring Voisey's Bay, a plan and proposal came forth for Falconbridge to abandon its attempt to acquire the property in Labrador and redirect its efforts and financial capacity at acquiring INCO itself. The strategic plan was presented to and declined by Falconbridge majority owners at the time, Noranda (and their majority owner - Brascan).

On 11 October 2005, Inco announced a proposal to acquire Falconbridge for $12 billion. This came at a time of especially high prices for base metals, including nickel. Part of the motivation for the merger was to avoid a takeover of either company by cash-flushed foreign competitors. Additionally, significant synergies would have been realized in the Sudbury operations in Project Pentlandite, with both companies performing the same kind of extraction and smelting work on the same kind of ore.[10]

The two companies were set upon by hostile takeover bids from rival firms. Swiss Xstrata, already 19.9% owner of Falconbridge through its purchase of Brascan's share,[9] bid for a complete acquisition, while Teck Cominco of Vancouver set its sights on Inco.[10]

On 13 May 2006, Inco announced that it increased its offer to acquire Falconbridge by $5.00 CAD per share, bringing the bid to $61.04 CAD per share (based on 23 June 2006 Inco/Phelps Dodge share price).[10]

On 26 June 2006, Phelps Dodge made a bid for the proposed combined Inco/Falconbridge company, valued at around US$40 billion. This would have formed the Phelps Dodge Inco Corp., valued at US$56 billion, creating the fifth largest mining company, largest nickel producer, and the second largest copper producer in the world with corporate and copper division headquarters located in Phoenix, Arizona and nickel division headquarters in Toronto, Ontario. The deadline for the Inco offer was 13 July 2006.[10]

On 18 May 2006, Xstrata had announced a proposal to acquire Falconbridge for $52.50 CAD per share. This was a cash offer, unlike the Inco offer of a combination of cash and shares. On 12 July 2006, Xstrata announced that it increased its offer to acquire Falconbridge to $59.00 CAD per share (an approximate total value of $22.5 billion CAD). This counter-offer was 9.6% higher than Inco's bid. The deadline for Xstrata's bid to be complete was 21 July 2006. Xstrata acquired and absorbed Falconbridge in late August 2006, leaving Inco open to bids by Phelps Dodge and the Brazilian company CVRD.[10][11] Falconbridge became Xstrata Nickel, which continued to be based in Toronto.

In August 2007 the Koniambo mine project was headed by Falconbridge Limited. CEO Aaron Regent was in talks with China Minmetals and China Development Bank about them investing in the form of debt rather than equity.[12]

On 2 May 2013 Glencore completed the merger with Xstrata.

type	Public company
fate	Acquired by Xstrata in 2006, renamed in 2007
successor	Xstrata Canada Corporation
foundation	August 28, 1928
defunct	October 28, 2007
location	Toronto, Ontario
industry	Mining

Falconbridge Nickel Mines

History

Operations as of 2006

Merger efforts and acquisition

Leadership

President

Chairman of the Board

Further reading

External links

References

History

Operations as of 2006

Merger efforts and acquisition

Social impact in Sudbury

Leadership

President

Chairman of the Board

Further reading

External links

References