Strike ends but tension still high at Highland Valley mine

A short-lived illegal work stoppage threatening operations at Highland Valley Copper near Logan Lake, B.C., appears to be over although the union and management have yet to resolve several contentious issues that triggered the action. Rod Killough, manager of human resources for Highland Valley Copper, told The Northern Miner that the company was awarded an injunction on March 30, and the workforce returned to work on the same day.

Highland Valley Copper is one of the world’s largest copper mining operations, ranking second on the basis of tonnage milled and seventh in terms of copper production because of its relatively low grade. It currently employs 1,100 union employees represented by the United Steelworkers of America. The company is a partnership held 50% by Cominco (TSE), 33.6% by Rio Algom (TSE), 13.9% by Teck (TSE) and 2.5% by Highmont Mining.

The illegal work stoppage, which lasted only several days, was triggered by the use of non-union contractors and by contractors bringing laborers on site when company laborers were on layoff. These key issues have yet to be resolved, and Killough said he expects they will be taken to arbitration before June of this year.

Highland Valley Copper continued to operate with staff during the work stoppage, and Killough noted that significant production numbers were achieved despite the wild-cat action. Although operations have resumed with the union workforce, Killough said the situation is still “tense.”

In October, 1989, management of Highland Valley Copper settled a strike that lasted more than three months. Cominco President Robert Hallbauer noted in a recent company report that the settlement was “expensive” and could impact negatively on the operations’ profitability should copper prices fall.

“One of the major issues in the last strike was contracting out,” said Killough. “We had thought we had it resolved but I guess we were wrong.”

Peter Ingersoll, a New York- based metals analyst with Shearson Lehman Hutton Inc., said if labor problems continue or escalate into a full-blown strike at Highland Valley, it would likely have some impact on 1990 copper prices.

Supply interruptions at several of the world’s leading producers kept copper inventories below normal in 1989, hence a strong price performance. Most metal analysts predicted that world production would increase in 1990 and put more copper than before on the market. This, combined with an industrial slowdown and less buoyant world economy, is expected to translate into a lower average price for the red metal than last year.

That generally bearish prediction is borne out by 1990 copper prices to date which average US$1.07, compared with US$129.10 as an average for all of 1989.

But Ingersoll said inventories on metal exchanges and in the hands of users and producers are currently lower than expected, with demand holding at better levels than anticipated. He said any major interruptions in supply would mean stronger prices than originally forecast for the second half of 1990.