Vale moots using scabs to break Canadian strike

Vale may use non-union workers to restart Sudbury nickel ops

After a strike at the miner's Ontario-based nickel operations entered its sixth week the group is preparing to use non-unionised workers to partially restart its mine; Unions bristled at the suggestion.

Cameron French, Reuters

24 August 2009

TORONTO - Vale has begun preparing for a partial restart of its Sudbury, Ontario, nickel operation using management and non-union workers, the company said on Friday, as a strike at the facilities neared six weeks in length.

"We have to keep all our options open, and no decision has been made in that respect, but certainly we have to do what's best for the business," said Cory McPhee, spokesman for Vale's Inco unit, the Canadian nickel miner Vale bought in 2006.

He said the company is running a program training managers to run the operations if the decision is made to restart.

While about 3,100 workers are on strike at Sudbury, there are about 1,200 non-unionized workers still on site maintaining the mines, mill, refinery, and smelter, he said.

McPhee and United Steelworkers Union Ontario director Wayne Fraser both said there have been no talks since the stoppage officially began on July 13.

Fraser bristled at the suggestion management could restart operations with workers out on strike.

"If they think they're going to keep us out on the picket line while they try to produce our product, they better think again," Fraser said in an interview.

"We'll use every tactic we possibly know to stop them from doing any production."

He would not elaborate on what tactics would be considered.

Fraser said the two sides are far apart on four or five major issues, which are believed to include canceling the company's defined-benefit pension plan to new workers, cutting a bonus tied to the price of nickel, and seniority issues.

Workers have also walked off the job at the company's mine in Voisey's Bay, Newfoundland, and the processing facility at Port Colborne, Ontario.

Strikes are nothing new at the former Inco operations, which have mined base metals from the Sudbury basin since the early 1900s. Office workers walked out for one day in 2007, while the main mining operations had work stoppages lasting at least a month in 2003 and 1997.

However, this is the first major strike at the operation under Vale's ownership, and it also comes on the heels of a plunge in demand for nickel, which may give the company less incentive to compromise on its position.

However, Jean-Charles Cachon, a business professor and Inco expert at Sudbury-based Laurentian University, says the company may risk losing a chunk of its workforce, as idle employees seek a paycheck in other sectors, such as the gold industry.

Fraser confirmed that several union members have quit since the strike began, and said that many have gone west to work in oilsands projects that have begun to restart as oil prices have climbed.

Nickel has also risen steadily over the past five months along with other base metals, but analysts said the strike is not likely having a significant impact on the price yet, as nickel inventories are still relatively high.

"According to the models that we have, when you look at supply demand, we're looking at a surplus still," said BMO commodities analyst Bart Melek.

"Certainly these strikes will accelerate the rebalancing, but probably not all that quickly."

(Reporting by Cameron French; Editing by Frank McGurty)

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