Mine bleeds as strike goes on

Workers at Rosh Pinah downed tools two weeks ago demanding a 14 percent across the board salary increase against management’s nine percent.

Protracted negotiations have been abandoned with workers vowing to continue with the crippling strike whilst management said it would not budge from its nine percent salary increase offer.

Rosh Pinah is owned by the world’s fourth largest iron ore producer, Kumba Resources.

Kumba’s general manager for corporate and investor relations, Trevor Arran said in a telephone interview that the strike was bleeding the mine.

Arran said that Kumba would not budge from its initial offer and said that it was now up to the Mineworkers Union of Namibia (MUN) to either accept the offer or reject it altogether.

He said that the strike was bleeding the mine, but could not say how much the mining firm had lost in production figures.

Arran however said that Rosh Pinah had enough stockpiled zinc to keep its refineries running.

Rosh Pinah, which produced 119 000 tonnes of zinc concentrates in the 2005 financial year, sends all of its material to Kumba’s Zincor refinery in South Africa, which had zinc metal output last year of 104 000 tonnes.

Arran said that there are some stockpiles at Rosh Pinah and Zincor to keep the operation moving but admitted that the strike was bleeding the company’s coffers.

The strike also comes when zinc prices on the London Metals Exchange (LME) have been rising for the past months.

LME zinc futures extended their advances this week, hitting a fresh record high of US$4 500 a tonne as short supplies and strong demand prompted funds to snap up a metal that is now up 136 percent so far this year.

Sister metal lead also hit a new all time peak trading at US$1 740 a tonne up from US$1 738 earlier in the week.

Rapidly declining stocks and a healthy demand for the metal (zinc), which is used for coating steel to protect it from rusting, have attracted funds to speculate on further gains.

Zinc stocks held in LME warehouses fell 101 625 tonnes to 101 350 tonnes, their lowest in over a decade and a far cry from the swollen levels of April 2002 at over 970 000 tonnes.

“This strike is not good for Rosh Pinah, it’s not good for the workers, it’s not good for Kumba and certainly not good for Namibia. It’s not a happy situation,” Arran said.

He said that MUN had boycotted a meeting which had been arranged with Kumba officials as it presses ahead with its 14 percent wage increase demand.

“The ball is now in their (MUN) court to try and resolve this dispute. Our offer remains fair and reasonable,” Arran said.

He quashed speculation from Namibia that workers at Rosh Pinah are being paid nearly half of what other workers in the Kumba group are being paid.

“We treat all our workers in a fair and equitable manner. We pay a very fair salary and we also have a profit sharing mechanism across the board. We have an equitable salary structure and no workers are discriminated against,” Arran said.

“Kumba officials flew in from Pretoria and NUM refused to come to the negotiations table. We have come to the table and they refused, so the union need to decide on what to do, we still have an open door,” he added.

November 2006
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