Palabora prepares for long strike

Denver — Palabora Mining is settling into what could be a long strike, after negotiations failed to reach an agreement over a 3-week walkout at the Palabora copper mine in South Africa.

The company, a 48.6%-held subsidiary of Rio Tinto (RTP-N), had said a compromise was close to being reached with South Africa’s National Union of Mineworkers. However, union leaders refused to sign the deal.

About 1,700 workers walked off the job in mid-May 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 at the open pit, forcing the processing plant to switch to stockpiles and ore from underground.

The pit was scheduled to close in early 2002, by which time Palabora would have reached full capacity at the 30,000-tonne-per-day underground block caving operation. Nearly 800 of the 2,500 jobs would be lost as a result of the closure.

Palabora produced 116,959 tonnes copper in concentrate in 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 the company, with the remaining shares listed on the Johannesburg Stock Exchange.