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Vale has reached a five-year collective bargaining agreement with the United Steelworkers at its Sudbury, Ontario, nickel and copper operations, ending a nine-week labor disruption there, the diversified Brazil miner said Aug. 4.
The agreement with Local 6500 was ratified in voting on Aug. 3, ending the labor disruption that began June 1, the company said in a statement. The deal takes effect immediately. Vale employees return to work the week of Aug. 9, with production ramping up in the weeks ahead, it said.
“This result reflects months of hard work and commitment on both sides and a genuine demonstration to favorably conclude negotiations,” Vale said. “Vale reaffirms its commitment to the long-term sustainability of its base metals business and its Ontario operations.”
LME cash nickel prices stood at $19,324/mt Aug. 4, up from $18,147/mt on June 1 when the Sudbury strike began, amid tight supplies and growing demand from a recovering stainless steel industry and for nickel for use in batteries for electric vehicles.
LME cash copper prices fell slightly following Vale’s announcement to $9,467/mt, down 0.95% on day.
Reviewing nickel, copper production guidance
The world’s biggest nickel producer and a major copper producer, Vale said in its July 19 Q2 production report that it was reviewing its 2021 nickel and copper production guidance following a Q2 marked by labor issues in Canada and maintenance issues mainly in Brazil.
Vale implemented contingency plans to preserve the integrity and safety of the plants and mines at Sudbury, it said. It also sold nickel from inventory during the period.
The company’s production of finished nickel was 41,500 mt in Q2, 15.3% below the output of a year previously, and 14.3% lower on-quarter, mainly due to the labor disruption at Sudbury and unscheduled maintenance at a kiln at Clydach Nickel Refinery in Wales, which impacted production from material sourced from Vale Indonesia.
At Onca Puma in Brazil, furnace “operational challenges” impacted finished production: these should be partially addressed by planned maintenance in the second half and completely in 2022, the company said.
Vale’s Q2 copper production fell to 73,500 mt, 13% down on the year and 3.9% lower on quarter, resulting from the labor disruption in Sudbury and delays in mining at Voisey’s Bay, the company said in its Q2 report. The fall was partially offset by a more robust performance in Brazil, due to the ramp-up of mine maintenance activities at Salobo and better performance at Sossego operations.
The Sudbury strike action had followed the union’s rejection of a previous collective bargaining agreement. The new agreement, which will last until May 31, 2026, “includes significant monetary improvements for existing members and preserves retiree health benefits for all future hires,” the union said in a letter to its members.
Source: Platts