Mining: A Brazilian standoff at Inco

Battle drums are beating in northern Ontario, where Sudbury Mayor John Rodriguez is nervously watching the picket lines at Vale Inco — the largest nickel-smelting operation in the world. The mine has been idle for weeks, thanks to a strike by members of the United Steelworkers Local 6500, and he fears that there could be blood on his streets before his city’s most famous industry starts running again.

The Steelworkers unit represents about 3,000 workers at Vale mining installations in Sudbury, who walked off the job on July 13, after rejecting demands by the Brazil-based mining giant to cut the local employee bonus system and water down the pension plan. Unionized workers at Vale operations in Port Colborne and Voisey’s Bay, Nfld., have joined Local 6500 on the picket lines — and tensions have been escalating since August, when Vale announced plans to use replacement workers — including some unionized clerical and technical workers — to restart mine and mill operations in Sudbury. Rumours abound that the company is bringing in foreign workers to assist.

“I’ve called every hotel,” the mayor says, noting he has not found any such foreign workers staying in Sudbury. “I am unaware of any visa applications, which is a good thing, because the federal government would be stark raving mad to approve foreign scabs to come here to break a strike.”

Rodriguez points to labour disputes of yesteryear. Truck drivers, he notes, ran over workers to cross picket lines. Strikers shot at management helicopters. “It has been a long struggle,” he says, but the city has managed to develop relatively peaceful labour relations despite massive cuts to the mining workforce. Now, thanks to Vale, he says, “we are heading back in history.”

The Brazilian company — which created headaches for Ottawa this year by cutting hundreds of staff jobs less than three years after winning approval to acquire the storied Canadian mining outfit — isn’t bleeding cash. It posted net earnings of US$750 million in the second quarter. Nevertheless, that’s down from US$5 billion during the same period last year. And according to the company’s latest shareholder report, CEO Roger Agnelli — who has been criticized by the Brazilian government for cost-cutting back home — wants Vale to “emerge from the current global downturn stronger than before.”

Union officials — who were told to expect “very little change” when Vale took control — insist they will not give an inch, noting Sudbury operations generated more profit in the past few years than Inco made in the previous decade. As for the so-called nickel bonus — which the mayor says injected about $90 million into the local economy in recent years — the Steelworkers point out that profit sharing only kicks in when Vale is making money.

Union spokesman Wayne Fraser says any resumption of mining will be seen as a declaration of “war.” Leo Gerard, a Sudbury native who worked up the ranks to international union president, says using replacement workers would be a huge mistake that would put lives at risk. He has put the federal government on notice that the union will hold it accountable for injuries.

“I’d be s---ting my pants if I was sitting in Ottawa,” Rodriguez says. The conflict has been a political sore point ever since Federal Industry Minister Tony Clement told a reporter earlier this summer that Sudbury should thank Vale for buying mining operations nobody else wanted, and saving the city from becoming a “valley of death.” At the time, Clement — who is suing U.S. Steel for alledgedly breaking commitments made to Canada when it acquired Hamilton’s Stelco for US$1 billion in 2007 — was apparently unaware the Brazilian firm had to pay $19 billion for Inco because it chose to enter a record-setting bidding war for what was clearly a coveted asset.

Cory McPhee, a Vale spokesman, declined to discuss the profitability of Canadian operations. “This is not about the price of nickel today, next week or even next year,” he said, noting management will not sit down with the union until it accepts the status quo is not acceptable. “Sudbury operations require significant investments of sustaining capital as the mines get deeper, the infrastructure gets older and new and increasingly more stringent environmental restrictions come into play. These are mandatory investments in order for us to keep producing, and must be considered in the overall business context.”

As for restarting local operations, McPhee said it can bedone safely, and there are plenty of good reasons to do it, including providing work for non-striking employees.

Nickel Belt NDP MP Claude Gravelle says Vale is deliberately trying to provoke striking workers. “They are presently hauling ore, which was always transported by trains, using haulage trucks that have to cross the picket lines.”

University of Windsor labour expert Alan Hall says agitating workers into taking actions that force the courts to weaken union control over picket lines is a common strategy during Canadian strikes. But forcing unionized workers to “do anything in the realm of the employees on strike isn’t typical.” Hall sees little hope for a peaceful settlement. “I don’t think there is any doubt that it will lead to trouble in this case.”

Miners like Russ Teetaert claim they’ll do whatever it takes to win this strike. “We didn’t demand the moon,” he says. “We didn’t ask for anything. Lawyers make $500 an hour, and they have assistants do all the real work. On average, Vale workers make $30 an hour while risking our lives every day.” Most people, he adds, can’t fathom what Sudbury miners do. “I work a scoop,” he says. “Go sit in a bathroom stall, then turn the lights off and bounce around, jarring your body for eight hours, and imagine the bathroom smells are fumes and that the ceiling could fall and that you are 5,000 feet underground. That’s why we make a bonus. There is no way I am going to take a cut for some Brazilian executive who thinks commoners like us should not be able to afford a nice truck.”

Rodriguez says Sudbury — which officially supports the strike — is not yet in emergency mode. But the contract at the city’s other nickel miner, Xstrata, is up early next year, and if Sudbury is forced to deal with two strikes, Rodriguez says local police might just need a lot of help.