Vancouver – After a marathon bargaining session, Untied Steel Workers of America local 7619 and management at the Highland Valley copper mine have reached a tentative pact averting a strike at the British Columbian operation.
Details of the settlement will be after the union meets with its membership later this week.
The union representing the mineworkers served a 72-hour strike notice on Friday, Jan. 16 after labour talks stalled. The notice came on the day that union and company officials were due back at the negotiating table, at the behest of a mediator, after talks broke down over wages and benefits.
“Unless an agreement can be reached prior to noon Monday the mine will be shut down,” said Richard Boyce, president of Local 7619.
The union has been without a contract since late Sept. and in a legal position to strike since November when it received a mandate from its members.
Management at the mine took the position that its three-year contract offer was good enough but workers say they have not had a pay or benefit increase in more than six years and are justified in sharing in the spoils of a rising copper price.
The Highland Valley Copper mine is a vast open pit mining operation in Logan Lake in British Columbia’s southern interior. The operation comprises two large open pit mines, extracting more than 90 million tonnes of ore per year. The high tonnage, low-grade mine is expected to produce 164,000 tonnes of copper this year.
Depleting reserves has the workforce at the mine shrinking by about 3% per year over the last four years. The operation currently employs 1,100 people, including 858 production and maintenance workers and 64 office and technical workers represented by the United Steelworkers of America.
The Highland Valley mine is majority owned by Teck Cominco (TEK-T) with Australia’s BHP Billiton (BHP-N) a minority 34% stake. BHP last month agreed to sell its interest in the mine to Quadra Mining.
Worries over a work stoppage at the mine, which marks around 1% of the Worlds copper production on an annualized basis, has dramatically boosted copper prices as smelters worldwide are desperately short of concentrates due to overcapacity and a production deficit.
Copper prices reached a six-and-a-half year high on Monday as stocks of the metal continued to fall rapidly due to strong demand, particularly from China.
The three-month copper contract on the London Metal Exchange recently jumped almost US$50 to US$2,436 a tonne, its highest level since July 1997.
According to the Copper Study Group, global demand for copper exceeded production by about 362,000 tons in 2003 and will exceed output by 386,000 tons this year after surpluses of the metal in 2001 and 2002.
The Highland Valley strike threat comes after Chile’s Codelco, the world’s biggest copper producer, averted what would have been a second strike in a month as Chuquicamata mine workers accepted a 3.15% pay increase.
On Dec. 15, the state-owned company settled its longest strike in seven years when workers at its Andina mine accepted the company’s offer of a 2.57% raise. The 11-day walkout helped lift copper prices. Codelco, which accounts for 12% of global copper production, announced that it will begin selling 200,000 tons of copper it had stockpiled after global inventories fell below 800,000 tonnes.