Labor dispute hurts Rio Algom’s earnings

The loss of ore production during a labor dispute at the Highland Valley copper mining operation in British Columbia last year resulted in reduced annual earnings for Rio Algom (TSE). For the year ended Dec. 31, Rio Algom, a 51.5% owned unit of the London-based RTZ Corp., reports net earnings of $73.1 million or $1.58 per share, down almost 45% from the $134.4 million or $3.02 per share reported a year earlier.

Consolidated net revenues were $1.71 billion, a decrease of 13.6% from $1.98 billion in 1988.

The company says the lower revenue is mainly a reflection of the sale of its steel manufacturing businesses last August, and the lost production which resulted from a strike at the Highland Valley Copper operation in British Columbia.

The extraordinary items in 1989 included a special onetime provision of $57 million, after tax, in relation to Rio’s planned mine closure costs in northern Ontario. In January, the company announced plans to close its Quirke and Panel uranium mining operations at Elliot Lake, Ont., by mid-1991. This was partially offset by a credit of $25.5 million resulting from the utilization of prior years’ tax losses.

Rio is also calling for redemption, on April 20, of all second performance shares — series A, which are issued and outstanding on that date. There is an aggregate of $21.4 million worth of such shares currently outstanding. The redemption price will be $5 per share plus accrued and unpaid dividends, the company says. Rio Algom (TSE) Year ended Dec. 31 1989 1988 Revenue (000s) $1,710,000 $1,980,000 Net earnings (000s) 73,100 134,400 Net earnings

(per share) 1.58 3.02004