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Vale Inco in Sudbury says strike has been costing $7 million a day in lost production

Ontario Superior Court Justice John Poupore, who issued the original injunction sought by Vale Inco July 29, is expected to rule later this month on how the company and United Steelworkers Local 6500 picketers are to conduct themselves on the picket
Vale Inco's Copper Cliff operation near Sudbury, Ont.

Ontario Superior Court Justice John Poupore, who issued the original injunction sought by Vale Inco July 29, is expected to rule later this month on how the company and United Steelworkers Local 6500 picketers are to conduct themselves on the picket line in Sudbury after considering submissions from both sides in the five-month-old labour dispute.

The parties had been scheduled to return to court for a three-day hearing beginning Dec. 9 after the company alleged breaches of picket-line protocol contained in the injunction.

Justice Robbie Gordon issued an interim order Nov. 28 regarding protocol on the picket line between striking Local 6500 Steelworkers and Vale Inco, which upheld the terms of the July 29 injunction issued by Poupore, limiting picketers to delaying vehicles by no more than 12 to 15 minutes on the picket line.

The company told Gordon it wants picketers to adhere to the injunction that limits delays to vehicles entering Vale Inco plants to 12 to 15 minutes; prohibits strikers from delaying pedestrians at Vale Inco's general office; and prohibits blockades at picket lines.

The July 29 injunction was upheld when Vale Inco took the union back to court Sept. 22. But when the company took the union to court for a third time Oct. 8 with allegations that members were breaking picket line protocol, Justice Paul Rivard told the parties to resolve their differences themselves and quit running off to the courts.

This is now Round 4 in the Ontario Superior Court of Justice between the company and union. On the return to court Nov. 27, Vale Inco said it tried to do what Rivard ordered in October, "but clearly it's not working" and the court's intervention was needed.

Vale Inco argued they have a right to conduct their business without being excessively delayed or blockaded in doing so. The company says it is losing $7 million a day in production in Sudbury because strikers are hindering access to its plants operating during the strike.

The union for its part argues that Vale Inco has been intimidating and harassing members by hiring third-party security guards who videotape and watch strikers' every move, provoking them and logging even the most minor alleged transgression.

Vale Inco has hired an outside company, AFI International Group Inc., which was founded in 1986, to patrol the picket lines for the company. AFI describes itself as providing "elite security, risk management and investigative services to protect people and property, both in times of crisis and through regular business operations." AFI says, "When labor disputes occur, business must continue."

Almost 3,100 USW Local 6500 members in Sudbury have been on strike for almost five months since July 13 with no new bargaining scheduled. The strike came near the end of what was to be a scheduled two-month production shut down - from June 1 to July 27 - at all Vale Inco operations in the Sudbury Basin.

In the late 1970s, the Steelworkers waged a lengthy nine-month strike against Inco in Sudbury from Sept. 15, 1978 until June 7, 1979. That landmark strike remains the biggest in Canadian history in terms of total lost workdays. There were about 15,000 Steelworker miners at Inco at the time of the 1978 strike compared to about 3,100 - a workforce one-fifth the size of the one 30 years ago - today.

United Steelworkers Local 6200 at Vale Inco in Port Colborne, Ont. has also been on strike since July 13. Local 6200 has about 120 members in Port Colborne. Of the 450 workers at Voisey's Bay, 120 United Steelworkers Local 9508 members are on strike against Vale Inco at its fly-in Voisey's Bay nickel mine in northern Labrador. They went on strike Aug. 1. Their most recent three-year labour agreement expired March 1.

Steve Ball, manager of corporate affairs for Vale Inco's Ontario Operations in Sudbury told the Thompson Citizen that in "mid-September we returned to court to request that the courts clarify provisions within the protocol that we could demonstrate were being violated by the USW.

"In early October we were back in court again with similar concerns. At that point Justice Rivard ordered that this matter was not making effective use of the court system and that our company and the USW were required to go away and try to work out details ourselves within the terms of the injunction for dispute resolution.

"In late November we felt that, despite our best efforts to do so, the excessive delays and blockades of our plants were still continuing and so we returned to court again - this time in front of Justice Gordon. Due to the length of the hearing it was not concluded in one day and an interim order was issued by the justice upholding the elements of the existing protocol with a clear understanding that delays and blockades would not be allowed to continue. He declined to order that the USW attend meetings with the company regarding resolution of a bussing protocol (which, in the original injunction allowed for such a protocol to be brought before Justice Poupore for a ruling if the two sides could not agree on terms). A future date to continue the hearing with Justice Gordon was set for Wednesday Dec. 9.

"On Wednesday, Dec. 2 representatives from our company and the USW met in the evening with Justice Poupore regarding the bussing protocol. At that time the justice heard further submissions from us and the USW regarding a number of matters including bussing. At the end of the meeting Justice Poupore stated that there would no further court appearance with Justice Gordon on Dec. 9. Instead Justice Poupore felt that enough information had been submitted for him to make a decision on the bussing protocol and other matters relating to the injunction protocol. Any details regarding these matters are now before the courts and can't be discussed in the public domain. A decision is expected before Christmas and we are currently waiting for that decision."

USW staff representative Myles Sullivan told the Thompson Citizen, "the Union and company met before Justice Poupore on Dec 3 to discuss a bussing protocol as the company is interested in having buses cross the picket line. At that time oral submissions were presented and both parties agreed to adjourn the Dec. 9, 10 and 11th dates before Justice Gordon. The parties will meet before Justice Poupore, in court sometime later in December."

Meanwhile, Ball said, Vale Inco's $25 million lawsuit against Local 6500 and 19 strikers is set to continue. "Statements of claim remain in place to be heard at a future, undetermined date," Ball said.

The parties have also spent most of the fall skirmishing at the Ontario Labour Relations Board in a hearing to determine the legality of Vale Inco's use of unionized office workers from another bargaining to do striking miners' jobs. Vale Inco is forcing about 50 members of USW Local 2020, representing office and technical workers, to do the work normally done by striking members of USW Local 6500.

The lawsuit seeks damages for intimidation, nuisance, unlawful confinement, intentional infliction of mental distress, injurious falsehood, conspiring to injure the plaintiff in its operations, including breach of contract and interference in economic and contractual relationships. Vale Inco is also seeking an additional $1 million in punitive and exemplary damages as well as court costs.

Edward Kucyk, the divisional strike co-ordinator for Vale Inco in Sudbury, swore an affidavit Oct. 1 outlining, what he says, are some of the company's expenses related to the strike.

Strikers' blockades of picket lines have forced Vale Inco to hire caterers to feed employees working inside Sudbury operations, as well as helicopters to fly them in and out, Kucyk says.

The cost of helicopters, whether Vale Inco uses them or not, is about $15,000 a day, Kucyk said in his affidavit. Live-in caterers cost $65,000 a week and $60,000 was being spent on food supplies for employees inside.

Vale Inco is also leasing space at a cost of $190,000 for some employees to work offsite in Sudbury. In the documentation, Vale Inco said it was paying for hotel rooms for management during the labour dispute, but the company didn't cite the cost.

In the same affidavit, Kucyk outlined the "harm suffered by Vale Inco" as a result of defendants' and picketers' "unlawful conduct."

Kucyk cites the cumulative effect of picketers' "blockades and misconduct" on Vale Inco's ability to resume production on schedule.

"If Vale Inco is not able to resume production in accordance with its production schedule, each day of delayed production will cause Vale Inco to lose approximately $7 million USD at current nickel prices," said Kucyk in the sworn statement.

Three locations - Coleman Mine, Garson Mine and Clarabelle Mill - have been restarted during the strike, the first time that has happened during either a strike or lockout in the mining company's 60 years of being unionized in Sudbury - first by the International Union of Mine, Mill and Smelter Workers, who merged with the Steelworkers in 1967.

Vale Inco resumed partial operations at Clarabelle Mill, processing ore bought from FNX Mining Company Inc. The company said the partial production at Coleman Mine and Garson Mine has been largely focused on production of copper concentrates, but workers are also being trained to restart the smelter to produce a nickel product, perhaps an anode, which is an electrode through which electric current flows into a polarized electrical device.

Inco has been owned by Companhia Vale do Rio Doce of Rio de Janeiro since the Brazilian mining giant purchased it in a $19.9-billion all-cash hostile tender takeover offer deal in October 2006. Valepar SA, the company that controls Vale, is owned by Previ, the employee pension fund of state-controlled Banco do Brasil SA; Bradespar SA, an industrial holding company; Mitsui & Co, Japan's second-largest trading company; and BNDES Participações SA. Created on June 1, 1942 by the Brazilian government, Vale was privatized on May 7, 1997.

Vale Inco says the revenue is being lost because of lost production at Coleman Mine and Garson Mine, and lost royalties from processing FNX Mining Co. Inc. ore at Clarabelle Mill.

Meanwhile, São Paulo, Brazil-based Barclays Capital analyst Leonardo Correa told Bloomberg News recently that it costs Vale Inco US $3 a pound to produce nickel in Greater Sudbury. As a result, he said, he didn't see "any sense in keeping Sudbury shut" amid rising nickel prices.

Nickel was selling Dec. 9 on the London Metal Exchange (LME) for about $7.30 per pound. It hit a high of $25.51 per pound on the LME in May 2007, but dropped briefly last fall to under $4 per pound before gradually recovering.

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