Canadian union calls for action against Xstrata

Mon Feb 8, 2010 5:15pm EST
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TORONTO (Reuters) - The Canadian Auto Workers union (CAW) is calling on the Canadian government to investigate international mining giant Xstrata's, plans to close its copper and zinc metallurgical plants at Timmins Kidd in northern Ontario.

While a mine and concentrator at the site will continue to operate, the plan to shut down the metallurgical plants on May 1 will result in about 670 job cuts. Xstrata currently plans to shift production from Kidd to smelters and refineries in Quebec.

The union is calling on the Canadian federal and provincial governments to investigate Xstrata's move.

"Should this investigation conclude that Xstrata has little reason to close the Timmins site, both levels of government must force Xstrata to divest their Timmins assets," the CAW said in a statement.

Last year, the Canadian government took U.S. Steel to court over production cutbacks at its Hamilton, Ontario-based Stelco subsidiary. A court ruling in the matter is expected shortly.

According to the Investment Canada Act, the government has the power to review a foreign company's investment in Canada and determine whether it varies from the original application and still results in a "net benefit" to Canada.

If this is not the case, the federal government can take legal action against the company to remedy the situation, or even force it to sell some of its assets.

The union is calling on the government to enforce a moratorium on the proposed plant closures until the matter is fully investigated.

However, Canada Industry Minister Tony Clement said in December that Xstrata's decision to close Kidd did not violate any federal investment agreements, and a ministry spokesman reiterated that point on Monday.   Continued...