Reports on protests at Inco AGM 2004Published by MAC on 2004-04-22
Reports on Inco AGM 2004
Inco sets sights on restoring dividend in 2005 - Payments stopped in 1999 could restart if progress made on Voisey's Bay, Goro
By Shirley Won, with files from reporter Wendy Stueck in Vancouver, Globe and Mail
Thursday, April 22, 2004
Toronto -- Nickel giant Inco Ltd. could reinstate quarterly payments to shareholders as early as next year, chairman and chief executive officer Scott Hand said yesterday.
The company stopped paying dividends in 1999 when nickel prices were low and two big new projects were in the works.
"The earliest would be 2005," Mr. Hand told reporters after Inco's annual meeting.
Mr. Hand said renewed dividend payments would depend on projects in both Voisey's Bay in Newfoundland and Goro in New Caledonia being well under way, but not necessarily in production.
Mr. Hand said Voisey's Bay is expected to start production by 2006. And he is "optimistic" Inco will proceed with its stalled Goro project in the South Pacific, but that decision won't be made until August.
Inco expects to deliver a progress report on Goro next month following a review aimed at getting that project on a firm financial footing. Goro was put on hold in late 2002 after preliminary cost estimates for the project soared.
The green light for a dividend would also depend on maintaining Inco's financial strength, Mr. Hand said.
Inco expects to generate $1.3-billion (U.S.) in cash flow this year while capital expenditures are expected to be about $1-billion.
Inco's stock, which closed yesterday at $44 (Canadian), has nearly doubled from its 52-week low of $24.60 last May.
On Tuesday, Inco reported a first-quarter profit of $255-million (U.S.) or $1.26 a diluted share compared with a year-ago profit of $33-million or 5 cents. Revenue totalled $1.09-billion, compared with $593-million in the same quarter last year.
During the 1990s, Inco gradually cut its dividend to 10 cents in 1998 from $1 in 1991, and eliminated the payments entirely in 1999.
At that time, the price of nickel had plunged to around $2.10 a pound on the London Metal Exchange. Nickel prices surged on strong demand over the past two years, and averaged $6.68 a pound during the first quarter, the third-highest quarterly average since the LME began trading the metal in the late 1970s.
Nickel prices are expected to stay strong until at least 2006, when major new projects are expected to come into production.
Before the meeting, about 25 demonstrators -- from Port Colborne, Ont., and as far away as New Caledonia and Guatemala -- protested what they described as Inco's "deplorable" environmental and social track records in their communities.
The protesters from Port Colborne accused Inco of delays in cleaning up soil in the Southern Ontario community where Inco ran a refinery between 1918 and 1984.
Some Port Colborne residents have been trying to have their case -- over health problems they claim are related to Inco's former operations -- certified as a class action.
Mr. Hand said Inco has pledged to remedy the situation and is ready to "do the right thing" and to date has spent over $17-million (Canadian) on a community-based public health process in Port Colborne.
Inco aims to revive dividends - Company wants to launch Goro, Voisey first
April 22, 2004
Hand assures investors about Ontario operations
Inco Ltd.'s plan to resume development of its giant Goro nickel mine by August may lead the nickel producer to look at another project reintroducing a dividend plan next year.
Speaking at the company's annual meeting in Toronto yesterday, chief executive Scott Hand said he is confident the company will announce in August that development at Goro, in the French South Pacific territory of New Caledonia, will resume following the site's second review.
"We wouldn't be doing all of the things that we are doing and we wouldn't be having the optimism that we do if we didn't think that there is a very good prospect that this project is going to go ahead," said Hand.
"We moved too quickly last time and this time we are doing it step by step and we're optimistic that we are going to succeed, but we have to await the final results."
Goro, one of the few big nickel projects earmarked for development this decade, was put on hold by Inco in December, 2002, after estimates showed a 30 per cent to 45 per cent cost overrun.
Inco plans to give a progress report on Goro in May.
The company also said it could re-establish its shareholder dividend once Goro and its Voisey's Bay nickel project in Labrador are under way. Inco halted its dividend in 1998 because of difficult market conditions and a commitment to expand the company.
While Inco did not rule out a dividend as soon as 2005 if the nickel market and its cash flow are strong, Hand leaned toward waiting until the two big projects start operating.
"We believe the most important thing is to be sure that we have both projects well under way, well understood, well controlled and well financed.
"And if, at that time, we are satisfied that that has occurred, and we are generating good cash flows, then we should be looking at the possibility of a dividend."
Operations at Voisey's Bay are expected to be commissioned late next year.
Inco's production was hit last year by a three-month strike at its main Ontario operations, but the company has set aside several initiatives for 2005 to help it beat its own target of 500 million to 510 million pounds of nickel this year.
In a tight market, where nickel demand will be limited by available supply, Inco said its Sudbury operations extended the intervals between furnace and maintenance stoppages and will operate this year without any major shutdowns.
Inco's annual meeting also drew protests from environmental activists, criticizing what they called human rights and environmental violations. They cited local indigenous opposition to the Goro project and a sluggish cleanup at a Port Colborne, Ont., nickel refinery that closed in 1984.
A personal note of proceedings from an attendee at the Inco 2004 AGM
Inco shareholders once again this year entered their annual meeting surrounded by protest. This year, drums, chanting, and dancing of the Algonquin First Nation captivated people as they either entered the meeting, protested or walked by.
Shareholders and passerbys were leafletted with the Inco 101 flyer (if you want a copy, please email me) as they entered the meeting location. People from Port Colborne, and activists in the Toronto area held placards, a banner, blew whistles and shouted for Inco to clean up their mess. One Port Colborne resident held a placard that read "Nickel was found in my soil, in my kitchen and in my left lung." We made noise for awhile outside the meeting then made our way over to Inco's head office on King where children from Port Colborne shouted "what do we want? Our health, our future."
On the inside...as Inco CEO Scott Hand began his speech on all the good things Inco is doing in the world in places like Indonesia, the drums all of sudden can be heard from the outside. Hand stumbled several times when asked some hard questions from people in the audience and at least once made a total idiot of himself. Only about 2 questions were related to business and dividends while the others came from our group. People who asked questions included Catherine Coumans, MiningWatch, Diana Wiggins from Port Colborne, Kanak representatives from New Caledonia, Jacques Boengkih, Senator Dick Meureureu-Goin and Chief Adrien Koroma, and Daniel Vogt from Guatemala.
One surprising admission from Hand was that he takes his recommendations from the Public Liaison Committee involved in the Community Based Risk Assessment process that is currently underway in Port Colborne. One of their recommendations is indoor air testing for 19 homes, which has been a contentious issue for some time.
Inco Affected Communities to Protest Inco's Abusive Mining Practices at Annual Shareholders' Meeting
For Immediate Release - Environmental Defence, MiningWatch Canada
April 19, 2004
Inco's Newfoundland and Labrador Track Record to be Highlighted
St. John's, Newfoundland - Incos deplorable environmental and social track record will be emphasized once again at the Canadian nickel mining companys annual shareholders meeting on Wednesday, April 21st. Representatives from New Caledonia, Guatemala, St. John's, Newfoundland and Port Colborne, Ontario impacted by Inco's operations will attend and take the opportunity to question Inco CEO, Scott Hand, about the company's poor environmental and human rights track record, and to demand real action and justice for their communities. A colourful demonstration is planned on the outside of the meeting location, the Design Exchange, 234 Bay Street, Toronto.
In June 2002, an agreement was struck between Inco and the government of Newfoundland and Labrador after six years of struggle between Inco and government bodies, the Inuit and Innu communities, and other Newfoundland and Labrador residents concerned about the impacts of Incos Voiseys Bay nickel project and Argentia hydrometallurgical processing plant.
Today, Inco has already broken at least one agreement, the Industrial Employment Benefits Agreement (IEBA), which requires Voisey's Bay Nickel Company Limited (VBNC) to give first consideration to local companies and not contract work outside the province if there are qualified local firms able to perform such work on a cost competitive basis. In February 2004, it was made known that a portion of the steel fabrication contract will be let outside the province. VBNC is claiming that the local firms cannot complete the work in time but critics say that VBNC did not let local companies know in a timely manner of these work opportunities, which they are obliged to do in the agreement. Provincial Natural Resources Minister Ed Byrne blames loopholes in the previous governments agreement and has stated that VBNC only has to make best efforts to ensure benefits accrue locally. This has led to the current provincial opposition party, the former governing Liberals, calling for the Minister's resignation.
Incos Argentia demonstration hydrometallurgical processing plant quietly received an exemption from environmental assessment requirements in December 2002 even though the project will involve experimental technology, and the use of hazardous substances on an already contaminated site. Hydrometallurgical processing has yet to be operational in temperate climates and has experienced numerous failures at pilot sites in Australia. The conditions to which the project received exemption included several environmental documents, some of which have not been made accessible to the public despite frequent requests.
Memorial University of Newfoundland students are another group unhappy with Inco. The university and Inco have entered into a partnership that involves the establishment of the Inco Innovation Centre in the heart of the university campus. Several toxic hearts have been painted on the construction wall surrounding the soon to be Inco Innovation Centre stating, "don't make Inco the heart of our campus." Concerned students and faculty have asked that the university put into place ethical safeguards to stop the solitication and acceptance of funds from unethical corporations like Inco. In February, the first annual "Inco Have a Heart Day" was held where a box full of Valentine messages signed by students was sent to Inco asking the company to act on one of their many bad practices. Memorial students also participated in the October global day of action against Inco with theatre depicting Inco's relationships with some of the most brutal and corrupt political figures of recent history, a vigil for those impacted by Inco, and a film showing of Inco's impacts in Port Colborne.
Today, people in Port Colborne and Sudbury, Ontario are fighting a daily battle both in and out of the courts to get Inco to clean up their contaminated properties. Last year, demonstrators from Port Colborne handed out "Inco dirt bags" outside of Inco's meeting. The bags were filled with Inco's legacy, soil contaminated with nickel oxide, a carcinogen. In other areas of the world, Inco has and continues to operate in corrupt and conflict ridden areas of Guatemala, Indonesia and New Caledonia.
- Media Advisory -
Environmental Defence, MiningWatch Canada
Representatives from communities around the world impacted by Inco attend annual shareholders meeting
What: Representatives from New Caledonia, Guatemala, St. Johns, Newfoundland and Port Colborne, Ontario communities around the world impacted by Inco operations will attend the mining companys annual shareholders meeting. They will take the opportunity to question Inco CEO, Scott Hand, about the companys poor environmental and human rights track record, and to demand real action to improve community relations.
When: Wednesday, April 21, 2004The shareholders meeting begins at 10:00 a.m.
Who: Representatives from New Caledonia, Guatemala, St. Johns and Port Colborne
NOTE: Representatives will be available for interviews after the meeting
Where: Design Exchange
234 Bay Street (west side of Bay between King and Wellington Streets)
About Environmental Defence: Environmental Defence protects the environment and human health. We research. We educate. We go to court when we have to. All in order to ensure clean air, safe food and thriving ecosystems - nationwide.
About MiningWatch Canada: MiningWatch Canada responds to threats to public health, water and air quality, fish and wildlife habitat and community interests posed by irresponsible mining policies and practices in Canada, and by Canadian mining companies around the world.
Contact: Jennifer Foulds, Environmental Defence Canada, (416) 323-9521 ext. 232 or (647) 280-9521 (cell)
Catherine Coumans, MiningWatch Canada, (613) 569-3439 or (613)-795-5710 (cell)