Strikes take their toll on Canadian miners

A flurry of strikes around the world created havoc in the mining industry for the 1-week period ended June 10.

Inco said a strike launched June 1 by 3,300 members of the United Steelworkers of America at its Sudbury and Port Colborne operations in Ontario would cost the company at least $20 million a month. Inco has declared force majeure on its commodity-grade nickel shipments, and watched as nickel prices soared about 15% to the US$9,300-per-tonne range. The company still has about 53,000 tonnes of nickel in inventory plus concentrates in its supply pipeline. The company ended the week at $27.70, up 26.

Meanwhile in Saskatchewan, 100 mill operators at the McClean Lake uranium mill will soon be returning to work after a short lock-out. The workers, members of the Communications, Energy and Paperworkers Union (Local 48-S), voted 89% for a new 3-year contract. France’s Cogema Resources operates the McClean Lake facility and briefy put it on standby. Denison Energy, which has a minority 22.5% interest in the operation, fell 3 on the week to $2.52.

Shedding 3 to $5.70, Toronto-based diamond and platinum junior SouthernEra Resources reported that unionized employees at its half-owned Klipspringer diamond mine in South Africa were on strike following a deadlock in wage negotiations. SouthernEra has rejected a package of union demands, which includes a 20% wage increase, and says the “marginal nature of the Klipspringer mine, exacerbated by the strength of the South African rand, has made it impossible . . . to concede to the union’s demands.”

The gold sector was not immune to labour unrest, with more than 100 miners commencing a hunger strike at Kinross Gold‘s Mavres Petres lead-zinc-silver mine in northern Greece. They are protesting against the major’s decision to push the mine into bankruptcy. Kinross, which declined 16 to $9.08, acquired the assets through its merger with TVX Gold last year.

The best news in the gold sector was the doubling of gold resources at the Cortez Hills discovery in Nevada, owned by Placer Dome (60%) and U.S.-listed Rio Tinto. Measured and indicated resources now stand at 38.5 million tonnes grading 3.63 grams gold per tonne (4.5 million oz.) at a 0.14-gram cutoff grade. Placer rose 41 to $15.23.

The rest of Canada’s gold miners were mixed: Barrick Gold fell 12 to $24.31; Cambior was up 8 to $1.70; Goldcorp slipped 22 to $15.50; Agnico-Eagle Mines rose 27 to $15.26; and Wheaton River Minerals tumbled 12 to $1.33 despite being added to the TSX composite index. Among the juniors, Crystallex International caught fire with investors and rocketed 52 to $1.74. It was trading at $1.97 at presstime.

The base metal majors were subdued: Falconbridge rose 17 to $18.35; Noranda gained 24 to hit $12.99; and Teck Cominco‘s B shares declined 25 to $11.