Union workers halt zinc smelter in Peru (June 20, 2001)

Denver — Zinc production has stopped at the Cajamarquilla smelter near Lima, Peru, where 350 union workers have walked off the job.

Cominco (CLT-T), which owns an 82% interest in the plant, says the strike is about negotiations over a new labour contract. The old one expired at the end of last year.

Negotiations broke down in early May, resulting in an illegal 10-day strike.

The two sides appear to be at odds over the pay scale. Cominco declines to give details, but says it has guaranteed: pay increases at about the inflation rate; improvements in several monetary allowances; and yearly closing bonuses.

Some progress has been made. The company and the union have agreed that the deal they hammer out will cover three years. Cominco wanted the 3-year contract in order to ensure labour stability during the US$300-million expansion project, which should double production to 240,000 tonnes refined copper per year.

A hundred employees are still working at Cajamarquilla, including staff and members of a second union. The plant is producing cathode zinc. The strike has halted production of refined zinc.

Production reached 34,000 tonnes refined zinc in the first quarter. Cominco would not speculate on what effect the strike will have on second-quarter or year-end production.