- Stoppage last year at Colombia mine lifted nickel prices
- About 70 percent of global nickel output seen as loss-making
Workers at South32 Ltd.’s Cerro Matoso, the world’s second-biggest ferro-nickel mine, voted to take strike action amid a dispute over negotiations on a wage agreement.
Members of the Sintracerromatoso union approved the move at the operation in northern Colombia, the union’s negotiator Eder Blanco confirmed in a text message. A strike must begin before June 14, and a deal to avert the action could be reached before then.
A previous strike at Cerro Matoso in April 2015 caused output to fall, leading to an increase in global prices. The nickel complex is among the world’s largest, with output of 27,200 metric tons in the nine months to March 31.
Perth-based South32 will continue to seek a resolution of the dispute, spokesman Tony Johnson said by phone. South32 fell 0.6 percent to A$1.60 by 11:58 a.m. in Sydney trading, trimming its advance this year to 50 percent.
Even as nickel prices rebounded 11 percent since touching a 13-year low in February, many producers continue to be loss-making. About 70 percent of global output is still unprofitable, according to GMK Norilsk Nickel PJSC, one of the world’s largest producers.
South32 is seeking to cut operating costs at Cerro Matoso by about a third and will reduce the number of employees and contractors by about 350 by the end of July, equivalent to 18 percent of the asset’s staff at June 30, 2015, the producer said in February.
Talks with Sintracerromatoso, the mine’s largest union, had centered on a company proposal to cut benefits and peg this year’s salary increase to 50 percent of Colombia’s 2015 year-end inflation rate of 6.77 percent, union president Domingo Hernandez said earlier this month.