Minera Andes (MAI.to): Back to work at San José

The NR out of Minera Andes (MAI.to) this morning was short and to the point, that the 14 day strike at its 49% owned San José mine (aka Minera Santa Cruz) was over.We got a bit more out of Reuters last night in this post, that explains the two sides are now in compulsory conciliation, an Argentine mechanism where the State takes the role of middleman and gets the two sides to agreement...most of the time. What happens now is that work continues while a 15 day negotiation process happens to reach agreement between staff and brass...hopefully. And yes, you're right, this doesn't mean that the strike is over and done with because if things go well we're all happy and if things go badly the strikers will strike again once the 15 days are over. Local press with more details can be found here and here, with the Spanish language reports noting that strikers will be paid in full by the company instead of having their pay docked as management threatened (this agreement was the basis for the unions to agree to the compulsory conciliation mechanism).

So watch this space.

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.

Bolivia raises fuel prices and there's trouble in store

Pretty big economic news out of Bolivia over the Christmas weekend, as the government of Evo Morales (with Veep Garcia Linera in charge while Evo visits Venezuelan flood victims) has bitten the bullet and slashed the government subsidies on vehicle fuel prices. Here's how Reuters covers the story:

LA PAZ, Bolivia, Dec 26 (Reuters) - Bolivia's leftist government raised fuel prices on Sunday by as much as 83 percent to foster oil production and cut state subsidies, in a politically tricky move that set off a transportation strike.

To offset the measure's impact, the government also froze public utility rates and said it will promote wage increases that top the 6 percent inflation estimated for this year.

In 2006 Bolivia's socialist leader Evo Morales nationalized the energy industry, which is centered on natural gas exports.

"We are bringing fuels up to international price levels ... State subsidies cost $380 million a year. We don't want this to continue. We buy expensive diesel fuel and sell it cheap," said Vice President Alvaro Garcia, who is standing in for Morales during the president's visit to Venezuela.

"We had to raise prices so energy producers feel the need and incentive to produce (oil), so there will be more diesel and gasoline and we will import less ... in one, two or three years, we won't have to import any gasoline or diesel at all," Garcia said.

Diesel prices will rise CONTINUES HERE

As for prices, these charts show you the before and after of the subsidy cut and in three different dosages (for ease of comprehension). First in litres...

..now in standard gallons (4.546l)

...and here in US Gallons (3.785l)

Be clear, this is a big move by the Morales government and the strike they knew they'd generate as a result isn't one that will roll over and die in a couple of days. This government isn't one that just makes a big decision like this one on the spur of the moment, either, so there's clearly strategic thought gone into the timing of this move (one thing that springs to mind is that tourist and citizen transport is greater than business/economic freighting and shipping over the Christmas/New Year period).

Economically speaking, it does make sense on a few levels. Firstly, Bolivia is a net exporter of natgas but produces little liquid hydrocarbons itself and is a net importer of diesel, gasolines etc. The subsidy that was being paid by the government was a clear net loser for the treasury. Also, the country runs on public transport (private car ownership is low), a medium that can absorb a huge percentage increase more easily. Thirdly, this subsidy cut, somewhat strangely, does appeal to the Socialist leanings of the Morales administration because a fuel subsidy is in effect a subsidy for those who can afford a car etc (the same 'tax break for the rich' argument is often used as a critique of Venezuela's heavily discounted fuel).

So this is a story that's worth watching in the next few days, a real test of the authoritive power of the Morales admin and one that will bring out transportists on a strike that may get ugly. Maybe a negotiation and semi-rollback of the subsidy is the eventual outcome? I don't know, but watch this space. 

UPDATE: An example of US analytical mediocrity: Of all the quotes on this issue that "academic" Greg Weeks could have chosen, he goes for the one that makes himself look like a total dumbass. A better example of total non-comprehension of South America would be difficult to come by.

The sad, continuing story of Doe Run Peru

It's difficult to explain just how much of a snafu the Twobreakfasts government has made of Doe Run Peru (DRP) but the latest chapter, written last night, should come as no surprise. Basically there are three actors in this play:

• Ira Rennert, billionaire owner of Genco who are in turn the owners of DRP. He's a piece of crap but at least he's a predictable piece of crap; he dosn't care about anything but the money.

• The workforce of DRP. They just want their jobs back.

• The government of Peru that has tried to be play at governance and authority and has been laughed off the stage. The result has been death, mayhem and inertia.

Twobreakfasts&Co has tried to play the strongman card about the environmental regulations that DRP has to comply with by the end of October.

"You must comply with the October 2009 deadline", says Twobreakfasts.

Ira says, "screw you, we want 32 extra months".

This extension comes on the back of a previous extension that he totally ignored, so there's no reason to believe he'll clean up DRP this time, either. So the government decides to "be flexible" (read KY Jelly) and give DRP 20 months to do its cleanup program.

"Screw you", says Ira. "I said 32 months, you bunch of wimps."

So continues the impasse. Meanwhile, Ira rallies his troops on site and tells them to strike again to demand that the government caves in and gives DRP the 32 month extension. This they do (out of fear for losing jobs and desire to get back to earning a salary). The main road is blocked, the police move in and last night yet another police officer dies on the scene when hit by rocks pushed on to their position by the strikers.

Rule of law? Rule of $$$$$. The senseless, toothless, wet blanket government of Peru still has no idea what it's up against. In the Wild West of neoliberal Peru, Ira's money talks and Twobreakfasts' bullshit walks. There is no national pride, because if there was Ira Rennert would have been kicked out of the country and his assets seized months ago. The cowards that run Peru bow and scrape before the altar of investment grade at all costs.

Peru, and a point to the working classes

The Shougang strike is over as of yesterday. Workers at its Marcona iron ore works on the South coast of Peru (specific hole in ground pictured above) had been protesting in a unanimous form since Monday 13th July, so it took 10 days for the Chinese owners to realize they can't treat people outside China they way they treat their own nationals.

Workers wanted a S/10 per day (approx U$3.30) pay rise and Shougang offered them a raise of S/0.70 (about U$0.25) per day. The workforce quite correctly took that as the insult it sounds like, downed tools and didn't cave in under pressure. Here's the final deal:

• A S/3.30 per day rise (approx U$1.10)

• A one-time bonus payment of S/1,300 (approx U$434)

• Meals supplied by the company for workers on duty

• Transport paid for (or partly paid for) by the company.

All in all, I think the Shougang workforce got themselves a good deal. Come the revolution, conmrades......

Another day, another strike in Peru

This time it's a transport strike that's also affecting The Republic of Lima, so media outlets are actually paying some attention. The strike is about the new road-users laws and fines trying to get pushed through by Twobreakfasts (hey...fining motorists is a great way to prop up GDP, no?), a whole list of new infractions that would put Peru up to the level of a serious country for transport...and Peruvians can't hack that idea.

Evermore pathetic El Comercio is lying through its teeth by reporting that only 30% of transport workers are adhering to the strike. The fact is that if you didn't commute early you're now stuck where you are in Peru.

Meanwhile, the 270-odd cases of industrial actions up and down the country get no press whatsoever....because we don't talk about these things, do we? Because Peru is a paradise of perfect development and social inclusion where the rich don't get richer without thinking of the poverty all around them first.

UPDATE: Twobreakfasts condemns the strikers, a sure sign of a successful strike. Jeesh what a dumbass.

Peru: Shiny happy people holding hands

Everyone around love them, love them
Put it in your hands
Take it take it
There's no time to cry
Happy happy
Put it in your heart
Where tomorrow shines
Gold and silver shine

R.E.M Shiny Happy People

Thanks to the Twobreakfasts government, Peru is now the place of happiness. Non-stop growth has brought wealth and opportunity to the whole country. The bright future that was promised has arrived. Peru is now on course to join the the industrialized nations.

Right?

Now most people know that the Bagua massacre happened, but surely that was an isolated incident There can't be that much social unrest in a country that's growing so quickly and so strongly, gaining plaudits from its peers and investment dollars attracted from abroad.

Right?

Wrong. In the sordid, rich-get-richer reality that is Peru, the Defensoría del Pueblo ("defender of the people"... a cool name for what's basically an ombudsman) registered 273 'cases of conflict' in Peru in the month of June (yes...one freakin' month!). Of those, 83% have not been resolved to date. By way of context, June 2008 registered 132 'cases of conflict'.

The current disputes also break down into categories, with the largest (47%) being social, 15% municipal government disputes and 12% labour disputes. As the protestors currently paralyzing provincial Peru and bits of Lima during the current, three day general strike would say, "Meet me in the crowd, people, people."

Finally in Peru, a protest that Lima can't ignore

Y'see, what usually happens in Peru is that some protest starts in the provinces and everyone ignores it. So the protestors wait a while...then block a few roads...and then the government shoots them all and hides the bodies (according to those people tracking the case there are 61 people still missing from the Bagua massacre, by the way).

But today it was day one of a brand new protest and it's already captured the headlines of all Peruvian newspapers, TV and radio...because it's in Lima. Transport workers (buses, taxis etc) are striking to reject a new set of transport rules that are due to come into effect tomorrow, including all sorts of new fines for doing all sorts of naughty roadthings. The result is that 50% of Lima didn't get to work on time today and 46 protestors have been arrested (so far) by tear-gas shooting policia (nice video on that link).

If it were anywhere else in the country nobody would give a damn and you'd have to search hard for the merest hint of a story; in fact the strike is concentrated around the Lima/Callao conurbation and reports from other major cities (Chiclayo, Cusco, Arequipa, Trujillo etc etc) are that transport is either nearly normal or normal. But you'd never guess it from the front pages that are screaming about "Peru halted" and other types of Republic Of Lima balderdash.

Peru; a very silly country with a very silly capital city populated by very silly people.

Doe Run Peru: Peru's main central highway now blocked

As explained on IKN last night, workers at Doe Run Peru, La Oroya are now on indefinite strike. Same people have also blocked the main "carretera central" highway that runs inland from Lima and is an important trunk road for the country's mining activity.

According to reports, police are turning back all traffic before it gets to the site of the block, thus isolating the protest (from view?....nasty feeling in pit of stomach about the near future, anyone?). And although there are 2,900 fed up DRP workers present and on strike the gov't is already spinning the protest as the work of "extremists" in its usual "blame anyone but the culprits" manner.

That same "extremists" argument is also being used to explain the protests today in Cusco that threaten the annual "Inti Raymi" festival that's always popular with foreign tourists. In fact, the protest has been rumbling on for months on end and is all about how local tour guides are under threat from new gov't plans to make the job of tourguiding available to anyone, thus making a mockery of the three to five year studies that current guides went through to get their qualified positions. But hey....free markets always favour quantity over quality....it's progress, ya knowz...


UPDATE: Good Spanish language coverage, with original on-the-spot photos and all that jazz, can be found at Huanca York Times.

Artisan Miners on strike in Peru

The scene in Lima a few minutes ago

Today in Peru, so-called 'artisan miners' started a 72 hour strike this morning to demand the overturning of a Presidential decree that, acording to them, refuses to recognize the rights of the smaller miner. What they're after is to be recognized and registered in the same way as the formal mining sector of the country. This will, in turn, allow them access to the international markets for their production and break their reliance on middle-men such as informal clearing houses and registered mining companies that buy up their production at a discount to world prices.

That doesn't sound like a big deal, but when you consider that artisanal mining has an estimated workforce of 300,000 people in the country and that the sector is estimated to produce 24 tonnes of gold per year (as well as all the other metals and non metallic mining production too) that's a sizeable sector of the country's workforce.

And another thing about artisan miners is that you don't wanna mess with these guys. The protest started today by blocking the main Panamericana highway at Nazca, South of Lima. According to reports, no vehicles are getting through and this has caused full-blooded chaos on Peru's main southern trunk road with tailbacks are already of the "I can see this on Google Earth" variety. The roadblock is clearly illegal and Interior Minister Cabanillas is already threatening to send the police in to break it up. I hope tempers cool on both sides, because if not it could all get rather nasty. Like I say, these are a hard bunch of guys. The next phase of the strike is starting about now, as a large body of the artisanal miners is now marching towards Congress in Lima in protest (see photo above).

Hochschild (HOC.L): On strike

Workers at the Peruvian operations of large silver miner Hochschild (HOC.L, quoted on the London Stock Exchange) went on strike last night. At present all four of the mines HOC.L operates in Peru (Ares, Arcata, Selene and Pallancata) are closed. It also has two other majority owned mines, San José in Argentina and Moris in Mexico. These are not affected by today's industrial action. Here's Reuters with its version.

The dispute is about the workers' profit-sharing plan that operates at HOC.L and all other Peruvian mines. Acording to Peruvian law, all mining companies are obliged to share 8% of profits with their workforce. HOC workers are accusing the comapny of dragging its heels on this, however HOC says that workers cannot expect the same amount of profit this year as they received last year due to market circumstances. The truth probably lies somewhere in between, but that's just personal speculation at this time.

On Wednesday HOC.L releases its year-end earnings and report, so at that time we'll know more about the hard numbers involved. Right now HOC.L says that the dispute won't affect production targets, which makes sense in the short-term but if the dispute goes on for more than a few days, that will change.

Coeur D'Alene (CDE) and Bolivia: Spot the difference

San Bartolome, Bolivia: A model workforce according to CDE

Want to know why I'm always cynical about corporate press releases, statements and political viewpoints? Here's today's example. This below is from Coeur D'Alene's (CDE) fourth quarter conference call transcript, courtesy of Seeking Alpha (one of the bits worth reading over there and a good service). Pay particular attention to the bold type.

".......At San Bartolome, the world’s largest pure silver mine, we’re now in full operation, with a targeted average monthly production of approximately 750,000 ounces of silver and a total annual targeted production of 9 million ounces for 2009.

I do want to take a moment here to acknowledge the very fine effort put forth by our entire workforce at San Bartolome. They’ve done an outstanding job of getting the operations up and running and we want them to know that Coeur recognizes and appreciates their contribution.

Looking forward, cost reduction and containment is and will continue to be a major priority at San Bartolome. In fact, we’ve already reduced our operating cost per ounce nearly 50% since commencing operations in late last summer. While San Bartolome is close to meeting our expectations for both production and costs, we will continue working to further enhance its economic efficiency as the year progresses"

And now this one from BNAmericas this morning:

Employees of Bolivian miner Empresa Minera Manquiri, a subsidiary of US firm Coeur d'Alene Mines (NYSE: CDE, TSX: CDM) that operates the San Bartolomé silver mine, have halted operations to demand that the CEO and other executives step down.

"The union is demanding that several company managers leave. This is a pressure tactic," a former Manquiri executive told BNamericas.

The employees, who also blockaded the Potosí-Tarija highway, are protesting because they do not agree with the way the company is being managed, the former executive said without providing further details.

Coeur d'Alene representatives were not available for comment when BNamericas contacted the company Wednesday.

San Bartolomé churned out 2.1Moz of silver in the fourth quarter and is expected to produce 9Moz this year at cash costs of US$6.50/oz.

San Bartolomé has 153Moz of silver reserves and 34.2Moz of indicated resources, which are expected to allow for a 14-year mine life.

In another part of that transcript, CDE explains that they put in new top management in Bolivia last year. Strange, then, that things aren't quite are beautiful as CDE would like to make out in its statement to shareholders......

From a Porteño viewpoint: El Campo

El Porteño is making a quick return this week. This is good news as far as Otto is concerned because 1) his views are sharp and 2) it means I don't need to think, just translate a few lines and hey presto! decent and original content.

Today's missive from the heart of Buenos Aires concerns "El Campo", which can be translated as "the country / countryside" "the rural area" , "the farmers / farmworkers", "agriculture" etc etc. Before we get to El Porteño's words, I'll add that since last year's successful agro protest campaign against the Klishtina gov't the Campo has continued with its complaints, and as you'll gather from the words underneath the initial support from the general population has been waning significantly.

So on with the show, and here's El Porteño. Enjoy.

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A Short Complaint Against the Campo

It's about time that small rural producers in Argentina realize they are being used by 20 or so large agro players. They send them to picket and strike while the big boys take off to Punta del Este (Ottonote: high-end beach resort in Uruguay) or Europe. The landed families don't even know what work is. They are people that haven't done a day's work in the last 150 years, they just live off their inheritances and lobby the government of the day (if it's friendly) or with the opposition (if not) or with their media buddies. Doesn't anybody realize that it's been this way in Argentina since the 19th century?

Due to the nature of my job I have quite a lot of contact with the 'Campo' and know without a single doubt that the big boys have made piles of money in the last five years. It's got to the point that they have so much ready cash they don't know what to do with it, as its also undeclared (ottonote: known in Spanish as "black") money. With the crisis that's coming they should shut their mouth and get to work. I'm fed up with them, they tire me out. They don't have the support of the population now, either.

We all have our problems, we pay our taxes and we muddle along on our own. They have to change their strategy, as more and more people are getting tired of their discourse. If their accounts don't square they don't sow, and they don't come along later with the argument of how there will be a food shortage, either. The fat cats don't sow and harvest out of love for their country, they only do it because they make a lot of money.

Enough of this hypocrisy. If any other industrial sector goes wrong, the businesspeople are screwed, they lose their investment and have to start over again. Nobody asks the government for help if things go wrong and we all pay our taxes in good times and bad. What's so special about the landed gentry of El Campo?

Firma y sello, El Porteño

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Chile: Gotta love the unions

With Chilean newspaper La Tercera this morning announcing that Chile's unemployment rate has climbed abve 10% and layoffs in the mining industry at 12,000 and climbing rapidly, the labour market in mapuchelandia is becoming a serious issue. So how do the local mining unions react? By threatening strikes! Here's an extract from this BN Americas report:

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"Continued layoffs in Chile's mining sector will cause workers to go on strike this year, copper miners federation FMC president Pedro Marín told BNamericas.

"If the layoffs continue, 2009 will be marked by strikes, work stoppages and protests," Marín said.

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LOL! I can just imagine the conversations between mining unions and Codelco management on this one:

Union: "If you don't stop laying us off from work, we're going to stop work."

Mgmt: "Great! Thanks! Go ahead! We're producing too much anyway, and this means we can avoid paying you without any of that mucking around with redundancy charges."

Union: We're not kidding you know...this is serious....we'll do it."

Mgmt: We can provide banners and stuff for your marches if you like.

Can somebody please take these unions leaders aside and explain to them the difference between a buyer's market and a seller's market? It's way too late to start complaining about the horrors of your country's neoliberal employment policies when it all goes sour.

News from "investment grade" Peru (part 3)

If that's glandular go see a doctor.

For the past 10 days, doctors have been on stike in Peru. The reason is pay and conditions (surprise), but the real bad feeling between doctors and the gov't goes back to January this year when both sides reached agreement on pay rises and improvements in working conditions, the Health Minister and the Doctors' Executive signed the papers and everything was done and dusted. The García government promptly ignored the accord, refused to honour the agreements and brought the matter to a head this month.

On Monday in Puno Gladys Huaraya, a 28 year old woman suffering a urinary infection, entered the local state hospital. She waited at the hospital in increasing pain all that day and was finally given a preliminary examination nine hours later. A couple of hours later she died from avoidable complications arising from the infection.

Who's to blame for her death? I'm sure you won't be surprised to learn that the doctors are laying the blame at the door of the government, and the gov't is laying the blame at the door of the doctors. However, as yet neither party has been to the house of Gladys and explained to her three children why their mother won't be coming home.

Viva investment grade. Viva viva viva

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