Workers mining raw materials boom for better pay

TORONTO - A steep rise in metal prices and soaring demand for raw materials have brought trickier labour relations for mining companies around the world, which are finding that unions have more clout to halt operations if they do not get a bigger share of profits.

Many producers are under pressure to share any windfall, through agreements on fair wages and benefits, or by smoothing relations with communities in which mines may provide jobs but also raise concerns about the environment and worker safety.

"It's our members that take the ore to the ground and refine it, mill it, smelt it, and that in turn generates the wealth for [nickel producer] Inco, so it's only fair that we get our fair share," said Wayne Fraser, of the United Steelworkers union in Canada.

In Mexico, the country's main mine union said this year it was planning a series of tough contract negotiations, and warned of looming problems even with companies that had good relations, such as Penoles.

But then union boss Napoleon Gomez, accused by the Government and some workers of skimming off millions of dollars from union funds, was ousted in a leadership challenge seen by many as a "coup" orchestrated by the Labour Ministry.

That has led to a string of strikes and slowdowns since February, with contract negotiations overshadowed by demands that the Government reinstate Gomez, believed to be in hiding in Canada. Short stoppages have hit almost all mines.

In the United States, top global aluminium producer Alcoa avoided a showdown with its unions last week with a last-minute deal for 9000 workers, averting the need for a threatened hard-line stand that could have included the use of replacement workers.

Such unrest has been balanced by the relative calm in Australia, home to the world's biggest miner BHP Billiton, where an acute labour shortage has led to greatly increased flexibility in wage negotiations.

With the Australian economy fuelled by the commodities boom, workers have found themselves well placed to reap the benefits with companies eager to pay, resulting in few disputes.

"When people know that their companies are earning so much more money, their expectations will rise and they will command higher salaries," said Ted Leschke, senior mining analyst at Shaw Stockbroking in Sydney.

"There's a labour shortage and people are getting offers left, right and centre for all trades. In some cases, you're hearing of join-up bonuses, which were unheard of up until now."

- REUTERS