Outsourcers on strike at Pascua Lama

Thursday, February 11, 2010

Close to 800 outsourced workers carrying out works at Barrick Gold's Pascua Lama gold-silver project on the border of Chile and Argentina went on strike February 9, demanding wage increases and better work conditions.

The workers, all belonging to the SINAMI union, are requesting the contractor companies "include a bonus in their wages considering they are working 4,000-5,200m above sea level," union leader Miguel González told BNamericas.

González added workers are also upset "they are being transported to work on regular buses, taking up to six hours to get there. They were previously transported by airplane, but the runway suffered damage from bad weather and all flights were cancelled."

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Contractor companies involved in the conflict are Tecno Fast Atco and Petra, both in charge of constructing definitive mine camps at the site, and Consorcio Minero Parina Cerro Alto (PCA), which has been conducting earthmoving works, González said.

The union representative said workers and contractor companies have started meetings at region III's labor office in order to find a solution to the conflict.

González said the union met with Barrick representatives last week to ask for their help on covering some issues related to work conditions which were not included in contracts with the companies conducting works at the site. "We received no answer on the matter," he said.

Barrick issued a statement on Thursday saying the company was aware of negotiations between contractor companies and their workers.

"Workers have a contract with PCA and it is not our responsibility to get involved in this matter," the statement added.

Construction works at Pascua Lama, which has a roughly US$3bn capex, started last October. According to the company's plans, the project is expected to start prestripping in the first quarter of 2011 and produce its first doré in 1Q13. Mine camps will be available as of the third quarter of 2010.

The mine is due to produce 750,000-800,000oz/y of gold and 35Moz/y silver in its first five years. Barrick has sold 25% of Pascua Lama's life of mine silver output to Canadian corporation Silver Wheaton for US$625mn in cash over three years plus the lesser of US$3.90/oz or the prevailing market price for silver.