MAC: Mines and Communities

Vale strikes in Canada could last into 2010

Published by MAC on 2009-08-25
Source: Northern Miner (2009-08-10)

The head of the Steelworkers Union for Ontario and the Atlantic provinces says it could be four or five months before Vale (VALE-N) and the union representing striking workers in Sudbury, Ontario and at Voisey's Bay in Newfoundland return to the bargaining table.

"There have been no talks since they tabled their final offer in the first week of July," Wayne Fraser told The Northern Miner. "We've made it clear to Vale that the union is prepared to go back to the bargaining table at any time to hammer out a collective agreement but there has been no response."

Cory McPhee, a spokesman for Vale in Toronto, said the union had not approached the company about returning to the bargaining table.

"We've received no request from the union to return to the table," McPhee said in an interview. "I'm not exactly sure what Mr. Fraser is talking about."

Both sides seem to have dug in their heels over key contentious issues in what appears will be a protracted strike. The Voisey's Bay union members rejected Vale's last offer for an agreement that would have cancelled a bonus tied to the nickel price and closed Vale's defined-benefit pension plan to new employees.

Vale argues that their latest offer was reasonable and fair and would allow the company to build a long-term future and remain competitive in all economic cycles. Roger Agnelli, a former investment banker and now Vale's chief executive who is known by some as "Iron Man," has said that Sudbury is the company's highest-cost operation and is not sustainable.

The union believes Vale disrespects its workers.

"This isn't about economics - it's about Vale's arrogance, their bully tactics that they try to impose wherever they have operations around the globe," Fraser said. "It is shameful behaviour by a foreign-owned company in this country....These guys are money managers...they are about the bottom line."

For its part Vale argues that the union doesn't realize the difficult times mining companies like Vale are in. "We put what we thought was a very fair and reasonable offer and the USW obviously disagreed and they have shown no inclination to recognize that change is required in the business," McPhee noted. "Until they do, there is very little to talk about."

McPhee added that it was impossible to speculate on the length of the strike but emphasized that Vale had not wanted a strike in the first place.

In response to Fraser's accusations that rising nickel prices (currently at about US$8.87 per lb.) meant that Vale's unwillingness to end the strike meant its shareholders were suffering unneccessarily, McPhee retorted: "This isn't about the nickel price today, or next month, or next year. This is about creating a foundation for decades to come that will allow us to operate a competitive and sustainable business...it's about our long-term future."

At presstime in New York, Vale was trading at US$20.29 per share. The Brazilian miner has a 52-week trading range of US$8.80-$27.75.

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