TORONTO (miningweekly.com) – Xstrata Nickel began contract negotiations with workers in Sudbury, Ontario, on Wednesday, a company spokesperson confirmed.
The process began with both sides exchanging proposals, said corporate affairs director Peter Fuchs, although he declined to provide any further details.
“We will not be commenting on ongoing negotiations.”
Xstrata and the Canadian Autoworkers union kick off talks as a strike by the United Steelworkers union at the other big Sudbury nickel-miner, Vale Inco, drags into its six month.
The Mine Mill Local 598/Canadian Auto Workers represents smelter, mine and mill workers at Xstrata Nickel's Sudbury operations, which the company acquired when it acquired Canada's Falconbridge, in 2006, for $18,1-billion.
However, after nickel prices dropped last year, Xstrata announced early closures of the Craig and Thayer-Lindsley underground mines, which were nearing the end of their productive lives, put its Fraser complex on care-and-maintenance and shelved the Fraser Morgan development project.
The firm, which is still operating the new Nickel Rim South mine, which is ramping up production, also announced in February this year it would cut 686 permanent jobs in Sudbury.
Fuchs said Xstrata is optimistic that a resolution can be reached with the union before the current contract expires on January 31.
“We are hopeful that we can successfully conclude a renewed agreement prior to the deadline.
“We are also optimistic that the constructive dialogue we have had with the union will continue into negotiations where we must address issues that are essential to ensuring that we can position the business so that it is robust and sustainable through the cycle.”
The Mine Mill Local 598 said last week that getting laid-off workers back to work was seen as the most pressing issue for the upcoming negotiations.
Nickel traded above $22/lb in 2007, but fell sharply, after slowing global economic activity dampened demand for the metal, which is used to make stainless steel.
Spot nickel traded at around $7,81/lb on Wednesday afternoon.
Earlier this month, Xstrata also announced it will permanently close its Kidd copper and zinc metallurgical plants in Timmins, from May 1, 2010. The decision will affect about 670 workers.
Both Xstrata and Vale, which also acquired a Canadian nickel producer - Inco - around the same time as Xstrata's Falconbridge deal, have come under criticism for their decisions to curtail operations and cut jobs after metals prices and demand fell last year.
Both companies signed agreements with the government in exchange for approval of the respective acquisitions, including commitments limiting layoffs, among other things, but the full details of the agreements have not been published, despite calls from opposition politicians and union leaders.
However, Xstrata's three year agreement ended in August this year, so it is no longer restricted by the terms, Industry Minister Tony Clement said last week.