Reorganizing copper miner Asarco has stuck a tentative deal to end a 4-month strike by some 1,500 unionized workers in Arizona and Texas. The deal extends the conditions of the existing collective bargaining agreements through the end of 2006.
Union members will vote on the plan by the end of the week. Pending ratification, Asarco will ask its bankruptcy court in Corpus Christi, Texas to approve the agreement.
“The agreement will allow the company to increase copper production during this time of unprecedented high copper prices,” said Doug McAllister, Asarco’s general counsel.
If the deal goes through, the company and union officials will work on a mutually acceptable schedule for the recall of employees. Asarco says with a full workforce production could increase immediately.
Most of Asarco’s workforce hit the picket lines on July 2 after members of the United Steelworkers Union rejected company demands for concessions, primarily on benefits. The company filed for protection under United States bankruptcy laws on Aug. 10, citing escalating asbestos claims and environmental remediation costs.
The proposed labour deal comes on the heels of the resignation of Asarco’s CEO Daniel Tellechea on Oct. 26. Tellechea’s departure came about a month after the National Labor Review Board (NLRB) issued a complaint concerning unfair labor practice allegations filed by the unions. The complaint will be heard by an administrative law judge in early December. Asarco plans to shortly name a replacement for Tellechea.
The company continues with its Chapter 11 court proceedings, and recently entered into a US$75-million debtor-in-possession financing arrangement with CIT Group/Business Credit.
Under the deal Asarco can only draw down US$20 million until the bankruptcy court approves the release of the remaining funds. A hearing is scheduled for Nov. 28.
“Asarco has been performing on its post-bankruptcy obligations to suppliers and vendors and the closing of the CIT credit facility will assist the company in continuing to meet its post-bankruptcy operating expenses going forward,” said Asarco chief financial officer Genaro Guerrero.
In other news, operations have resumed at the company’s Hayden smelter 112 km northeast of Tucson, Ariz. The smelter had been shutdown since Oct. 2 to allow for repairs to the Inco flash furnace. The north end of the furnace wall suffered a failure due to leaks in the water jackets. There were no injuries and the damage was confined only to the flash furnace.
The Hayden operations includes a 27,400 ton per day concentrator and a 720,000 ton per year copper smelter comprising an oxygen flash furnace, converters, anode casting, oxygen plant, acid plant.
The plant currently produces about 9,000 tons of copper anode per month. Anodes are shipped to the Amarillo copper refinery.
Asarco is a subsidiary of Mexican copper giant Grupo Mexico (GMEXICOB-M, GMBXF-O).