March 12, 2010 / 5:49 AM / in 10 years

Vale Sudbury workers reject settlement offer

TORONTO (Reuters) - Striking workers at Vale’s VALE5.SA nickel operations in Ontario, Canada decisively rejected a contract settlement offer from the company, meaning the 8-month work stoppage will continue, a union official said on Thursday.

Wayne Fraser, regional director of the United Steelworkers union, which represents the more than 3,000 striking workers at Sudbury and Port Colborne, said the vote was nearly 90 percent against the offer.

Mediated talks between the two sides broke down this week. Union leaders described the latest company offer as falling far short of the union’s expectations, but still held the membership vote.

A separate strike at Vale’s Voisey’s Bay nickel mine in the eastern Canadian province of Newfoundland and Labrador has been going since last August.

The Brazilian mining company acquired the Canadian assets when it bought nickel miner Inco in 2006.

In Sudbury, the two sides have been at odds over proposed changes to pensions and a worker bonus tied to the price of nickel.

Tensions increased late last year as the company partially restarted the operations using contract workers and employees from outside the striking bargaining unit.

Nickel prices have been slow to recover from a steep drop in 2007 and 2008, giving the company little incentive to come to a quick resolution.

Vale’s Sudbury operations — which include several mines, a mill, smelter and a refinery — produced 85,300 metric tons of nickel in 2008, while Voisey’s Bay produced 77,500 metric tons. Output at both sites dropped sharply in 2009 due to the strikes, as well as deliberate shutdowns due to weak nickel demand.

Reporting by Cameron French; Editing by Anshuman Daga

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