Talks Break Down in Vale Sudbury Strike

TORONTO, May 10 -- Talks aimed at ending a 10-month strike at Vale's (VALE5.SA) Canadian nickel mining operations in Sudbury, Ontario, broke down on Friday, sparking blockades by disgruntled workers.

Negotiators for the Brazilian company and the United Steelworkers (USW) union resumed talks late last month at the request of a mediator appointed by the Ontario provincial government to help find a resolution to the walkout, which began July 13.

"Unfortunately, I have concluded that, at this time, no such pathway exists. Accordingly, I have adjourned these discussions," mediator Kevin Burkett said in a statement.

It was the second time this year the two sides had held mediated discussions. A similar attempt to reach a deal in early March ended with a contract proposal from Vale that was condemned by union leaders and decisively rejected by membership.

Vale responded to that vote by increasing production that it had started late last year, using non-unionized workers, as well as third-party contractors.

A total of 3,100 workers are on strike at the Sudbury mining and milling operations, as well as Vale's Port Colborne, Ontario, refinery, over pension, bonus and contract language issues.

A separate strike at Vale's Voisey's Bay nickel mine in Eastern Canada has been going on since Aug. 1.

Vale acquired the operations in 2006 when it bought Inco.

UNION WANTS MORE TALKS

Wayne Fraser, a USW director involved in the negotiations, has criticized the company for trying to force harsh concessions on the union, but said the talks this week had brought some progress.

"I think we made some headway, but there's still some critical issues to deal with, so we're hoping that we have just a short intermission and then get back to the table," he said.

Vale issued a statement saying it had presented the union with a plan to return employees to work and that no further talks were scheduled. The company did not return calls seeking additional details.

Fraser confirmed reports that strikers in Sudbury had set up blockades at the Clarabelle mill and Coleman mine, which the company has been operating through much of the strike.

He said the blockades had not been planned by union leaders.

"It just sprung up because people are just fed up," he said.

Under rules imposed by courts during the strike, the union can only have eight strikers at a time at each site, and are allowed to impose only short delays on vehicles entering the operations.

Nickel prices have risen sharply since the strike began, as demand for construction materials has rebounded. However, global nickel inventory has remained high, giving the company less incentive to reach a deal quickly.

Together, Vale's Sudbury and Voisey's Bay operations produce about 10 percent of global nickel supply.