Denver — Palabora Mining, a 48.6%-held subsidiary of Rio Tinto (RTP-N), is settling into what could be a long strike after negotiators failed to reach an agreement over a three-week walkout at the Palabora copper mine in South Africa.
Palabora says it was close to working out a compromise with South Africa’s National Union of Mineworkers, but union leaders refused to sign the deal.
About 1,700 workers walked out May 22 after the union rejected Palabora’s offer of an 8% wage increase. The union had asked for a 13% increase, plus a monthly housing allowance.
The strike stopped production from the open pit, but the processing plant switched to stockpiles and ore from the underground portion of the mine. The company is already seeing a decrease in copper output. It has implemented an operation plan that is designed to withstand a strike of several months.
The open-pit was scheduled for closure in early 2002, when Palabora will have reached full capacity at the 30,000-tonne-per-day underground block caving operation.
Nearly 800 of 2,500 jobs would be lost as a result of the closure.
Palabora produced 116,959 tonnes copper in concentrate for the year ended Dec. 31, 2000, down 11% from 131,542 tonnes in 1999.
The mine also produces significant byproducts from the ore, including magnetite, vermiculite, apatite, zirconium, titanium and uranium.
Anglo American (AAUK-Q) controls a 29% interest in Palabora. The remaining shares are listed on the Johannesburg Stock Exchange.
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