12 September, 2011
ICEM’s trade union affiliate in Peru, the National Miners’ and Metalworkers’ Union (FNTMMSP), has affiliated branch unions undergoing pivotal labour disputes in the South American country in the face of high commodity prices and ever-rising profit margins.
On 31 August, 1,124 miners employed by China’s Shougang Hierro Perú began an indefinite strike at the country’s only iron ore mine in southern Peru. And last week, 1,100 union branch members of FNTMMSP undertook a 48-hour strike at the Sociedad Minera Cerro Verde open pit copper and molybdenum mine in Arequipa department over regressive conventions proposals in a proposed five-year labour agreement.
The FNTMMSP branch and managers of Cerro Verde will meet today in efforts to resolve the dispute. If no solution is found, unionized miners will begin an indefinite strike beginning on 14 September. Cerro Verde is Peru’s third largest copper mine and is owned by US-based Freeport-McMoRan (53.7%), SMM Cerro Verde Nederlands (21%), a unit of the Japanese Sumitomo Corp., and Peru-based Compania de Minas Buenaventura (19.3%).
FNTMMSP General Secretary, Luis Castillo Carlos
Cerro Verde management is proposing an initial 2% salary increase, but then seeks to eliminate all future yearly wage reviews in favour of a production bonus defined by the company and based on copper production, the mine’s financial results, and copper prices on the London Metal Exchange.
In 2010, Cerro Verde produced 312,336 tonnes of copper in 2010. Notwithstanding an indefinite strike that could begin on Wednesday, 2011 production is expected to exceed the 2010 numbers slightly. The 48-hour strike on 7-8 September saw 100% participation.
At Shougang Hierro’s Marcona iron ore pits in the Ica department, the strike by miners in yet another in yearly walkouts against the Chinese steel company over pay that is far lower than any other mining enterprise in Peru.
Iron ore miners earn a miserly €11.18 per day (US$16.10) and are seeking a 25% increase. Shougang Hierro is offering only a US$.47 per day increase. The strike is also over a failure on the part of management to meet a list of 2011-2012 demands on working conditions, which the union submitted in April 2011.
“We know that the Chinese company can meet the wage demands of workers at Marcona because of the high price of iron ore and Shougang’s large profit margins,” said FNTMMSP President Luis Castillo Carlos.
The Chinese company realized a five-fold increase in profit from Marcona in the first half of 2011 from that of the same period in 2010. The first-half 2011 net profit of US$274 million came on higher sales volume and higher iron ore pricing, the company reported to Peru’s securities regulator.
Iron ore sales from Marcona totaled 5 million tonnes from January through June this year, up 25% from the 4.02 million tones of refined iron ore sold during the same period of 2010. Because of the strike, Shougang Hierro declared force majeure on 1 September. A provincial government agency is involved in mediation efforts to reconcile the two sides.