Firm Buys Fluor’s Mining Operation for $100 Million
Cash-hungry Fluor said Friday that it has sold its domestic zinc mining, processing and marketing operation and related properties to a large New York-based manufacturing firm for about $100 million.
The buyer, Horsehead Industries Inc., through a division called New Jersey Zinc Co., paid $62 million in cash for the zinc business and has assumed the operation’s $38-million debt, Fluor said.
Just last month, Fluor announced an agreement to sell its 90% share of St. Joe Gold Corp., as well as its other other gold properties, to an Australian mining company for $500 million cash.
And Fluor said Friday that it also plans soon to sell its international metals business, consisting primarily of a lead, zinc and silver mine in northern Argentina.
Since 1983, Fluor has sold oil, natural gas and mineral resources and related companies worth more than $1.2 billion.
The latest sales, as well as the anticipated sale of its international metals operation, are expected to give Irvine-based Fluor, which is struggling to reverse nearly three years of losses, a one-time net gain in its fourth fiscal quarter.
In a prepared statement about the sale of the zinc business, David S. Tappan Jr. Fluor’s chairman and chief executive, said Friday that the operation “does not fit our long-term strategic direction. As previously announced, we intend to concentrate on engineering, construction and technical services . . . “
Fluor’s purchase of St. Joe Minerals in 1981 for $2.2 billion has been decried by Wall Street analysts as a colossal error. The company was purchased at a premium price just as the minerals business hit its apex and plunged into a long tailspin. At about the same time, Fluor’s mainstay business of designing and constructing large refineries, petrochemical plants and other energy projects collapsed. “The company was in excellent financial shape before it bought St. Joe. And afterward it was an absolute disaster,” said Robert W. McCoy Jr., an analyst with Kidder, Peabody & Co.
