What's going on at Minera Andes (MAI.to)?

A big fat strike at its only working mine, that's what. We're now in the 14th day of a mine-stopping strike at the San José mine 51% owned and operated by "the JV partner from hell" Hochschild (HOC.L) and 49% owned by Minera Andes and if the meeting scheduled for 1pm local time doesn't go well, the AOMA miners' union down there in Santa Cruz Argentina plans on calling a regionwide strike to protest the bad work practices that management impose upon employees. Here's the text that appeared in IKN104 about all this deal yesterday:

Minera Andes (MAI.to) San José strike in its 13^th day

More details have been appearing in the local Santa Cruz press about the strike at the San José mine, 51% owned and operated by Hochschild (HOC.L) and 49% owned by Minera Andes (MAI.to). It started on April 18^th (recall that it was only reported by HOC.L/MAI.to after the close of market Thursday 21^st April, after the market week had finished (5)) and far from getting close to a settlement, it seems that the worker’s union AOMA is considering calling a regionwide strike (6) to support the striking workers at San José and force the management to the negotiation table, something that might also happen via a government led compulsory negotiation as well.

 

The complaints of workers seem to have substance. There are reports of insecure working conditions at the San José mine which include an accidental death on March 12^th this year (7)  which workers say was largely due to bad H&S policy and a mentality of “cutting costs at all costs” at the mine, as well as many other accidents that anecdotal evidence (i.e. from griping workers) says go unreported.

 

There are other unsubstantiated but reliable sounding anecdotals reaching local press (8) (9) of the mine paying workers less than the agreed salary for their jobs, making them work unpaid extra hours under threat of dismissal, going back on agreements to turn currently third party contracted miners into full-time direct employees (which brings a host of extra benefits), the systemtic rejection of any sort of pay rise negotiations by management (we recall that Argentine real inflation is estimated at around 25%) bad living conditions and a lack of uniforms and personal safety equipment for the mineworkers.

 

Now we know that the San José mine is 51% owned and operated by Hochschild (HOC.L), the company that Rob McEwen of MAI.to (49% owner) calls “the JV partner from hell”. However, are we also supposed to believe that 49% owner of San José MAI.to knows nothing about the alleged bad working conditions and cheapskate attitude towards its workforce that has led to this current protracted strike that is said to be costing the mine one million Argentine Pesos per day (around U$243,000)? If I ran a company like this and were staring at a strike action that cost my company U$1.5m so far for its 49% share, I’d personally be all over the whys and wherefores of this event. I’d also be fairly aware of the operating costs at San José on a day-to-day level. I’d also know about the safety record of the people I were paying to do the job in hand. Being non-operator doesn’t give MAI.to a free pass here, sorry and all that.

 

There’s clearly bad feeling between management and workers at San José and although it’s unlikely to be one-way traffic and management is to blame for everything whilst the union-backed workforce are innocent lambs, things are not right and those in charge have to accpet at least some of the responsibility. What I’d like to know is just how much MAI and its famous hands-on leader knows about the whole affair, starting before the recent fatal accident (of which details were covered up for over a month by the San José management team) and moving through to today. Unfortunately at time of going to press the initial inquiry mail your author sent into MAI.to has not been answered, nor has the repeat mail (best to make sure these things get through) seen an answer. Watch this space, but for the time being your author is going to do one of his pathetic “social” handwringing things and not get involved with a company that has a seemingly dubious record and bad blood to cope with at its only operating mine.

The point here is that McEwen might not be operator at San José, but he's not stupid either and this is the type of thing that turns around and bites your nether regions when you treat workers badly. Get your act together, MAI.to, treat people right and the bad press will turn to good.