October 30, 2013 / 5:30 PM / 4 years ago

UPDATE 1-Barrick Chile mine workers set to strike

* Workers poised to strike after rejecting contract proposal

* News of likely stoppage comes day before Barrick results due

SANTIAGO, Oct 30 (Reuters) - The majority of Chilean union workers at Barrick Gold Corp’s suspended Pascua-Lama gold mine have voted to strike, which they say could delay the reactivation of the controversial project, according to a union statement on Wednesday.

Both the country’s Supreme Court and environmental regulator SMA have halted the complex, which straddles the Chilean and Argentine border, until new infrastructure is built to prevent the mine from polluting nearby water supplies.

Roughly 60 percent of the 300-worker union involved in the construction of the infrastructure has voted in favor of the labor stoppage after rejecting the miner’s contract proposal on grounds its benefits were insufficient, the union said.

The last round of voting will wrap up on Wednesday night. A potential strike would materialize between this Friday and next Friday.

The union said that Toronto-based Barrick has “pressured union workers to ... train contract workers, who would replace them during a potential strike, threatening workers with retaliation if they refuse to provide the training.”

“However, up to now union workers have refused to train the contract workers,” the union added. The union also says Barrick has treated them unfairly and it denounces a recent wave of lay-offs.

Chilean law states that companies can, under certain circumstances, hire replacement workers to fill the gap left by strikers.

Barrick told Reuters it “hopes to resolve our negotiation process in the best way for all sides.”

It was not immediately possible to get a comment from Barrick on how a potential strike could affect construction or whether it could delay the project.

ANOTHER CHILEAN WOE FOR BARRICK

The looming strike is another Chilean headache for Barrick, which is likely to raise the cost estimate for Pascua-Lama for the third time in less than two years when it reports results on Thursday.

Last May, Chile’s regulator told Reuters that it would be one to two years at the earliest before Pascua-Lama would be reactivated, given the time it will take to build the water management system. 

Barrick has stopped construction on the roughly $8.5 billion mine and submitted a plan for water management infrastructure to the SMA. The miner said in June that Pascua-Lama, on which it has already spent around $5.4 billion, had been delayed until mid-2016.

The project was frozen at the request of a local indigenous community, who says water polluted by construction processes has run off into the Estrecho River, which indigenous and other communities in the valley need for agriculture and personal use.

The complaint said excessively high concentrations of arsenic, aluminum, copper and other elements have been found in the water near Pascua-Lama, which is one of the most unpopular mining ventures in Chile.

Barrick denies it polluted the river.

Several other mining and energy investments have faced stiff opposition in Chile, where increasingly empowered communities are seeking stricter environmental standards and improved wealth distribution.

Chile’s robustly growing economy is heavily dependent on mining, with roughly 60 percent of export revenue stemming from copper.

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