Vale's Sudbury deal raises hopes for Voisey's Bay

Mon Jul 5, 2010 12:27pm EDT
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By Euan Rocha

TORONTO (Reuters) - A tentative agreement to end a year-long strike at Vale's Sudbury, Ontario, mining operations has raised hope that the Brazilian company may soon settle with striking workers at its Voisey's Bay nickel mine on Canada's East Coast.

Bob Gallagher, a spokesman for the United Steelworkers union, said the tentative deal with more than 3,000 workers in Sudbury and Port Colborne, Ontario, will make it easier for the two sides to settle at Voisey's Bay, where roughly 200 workers have been on strike since August 1, 2009. The Steelworkers represent Vale's workers in both Ontario and at Voisey's Bay.

"They are separate agreements and it would have to be resolved separately. But we are assuming with this clearing that it should be easier for Voisey's Bay," Gallagher said.

Together, the Sudbury and Voisey's Bay operations account for roughly 10 percent of global nickel supply. Prices are up 3.4 percent this year, making nickel one of the strongest performers among metals, most of which have seen double-digit percentage price declines.

Cory McPhee, a spokesman for Vale, was more cautious about a settlement at Voisey's Bay, noting that it is "probably a leap at this point" to view the tentative deal in Ontario as having an impact on talks at Voisey's Bay.

"However, we have always said it appeared to us that from the USW's perspective getting a settlement in Ontario was a first step," McPhee said. "We want to return to normal production in Voisey's Bay as well. There are no talks scheduled there, but certainly that would be our intent."

Voisey's Bay, located in the province of Newfoundland and Labrador, produced 77,500 tons of nickel and 55,4000 tons of copper in 2008, the last year of uninterrupted production.

Vale resumed partial production at Voisey's earlier this year using nonunion workers and outside contractors at an annualized rate of about 19,000 tons of nickel and 15,000 tons of copper.   Continued...