Magma Tintaya labor contract unique for Peru

The Peruvian subsidiary of Arizona-based Magma Copper has ratified a long-term labor contract with its unions.

The agreement is unusual in that it commits Magma Tintaya and the unions to a 5-year agreement, from July 1, 1995, through June 30, 2000. Most labor contracts in Peru are designed to last only one year.

Magma Copper President Burgess Winter describes the contract as “a truly historic event for the mining industry of Peru,” adding that it is equivalent to the company’s unique 15-year contract for its American operations.

Burgess says the contract provides the foundation for the development of a “cultural transformation” at Magma Tintaya, which will increase productivity, reduce production costs and reward employees for performing well. Some workers will be able to earn more than they will under a traditional labor agreement.

Magma Copper is one of the largest producers of primary copper in the U.S. Through Magma Tintaya, it also operates copper mines in southern Peru.