TORONTO, July 5 (Reuters) - A tentative agreement to end a year-long strike at Vale's (VALE5.SA) Sudbury, Ontario, mining operations has raised hope that the Brazilian company may soon settle with striking workers at its Voisey's Bay nickel mine on Canada's East Coast.
Bob Gallagher, a spokesman for the United Steelworkers union, said the tentative deal with more than 3,000 workers in Sudbury and Port Colborne, Ontario, will make it easier for the two sides to settle at Voisey's Bay, where roughly 200 workers have been on strike since Aug. 1, 2009. The Steelworkers represent Vale's workers in both Ontario and at Voisey's Bay.
"They are separate agreements and it would have to be resolved separately. But we are assuming with this clearing that it should be easier for Voisey's Bay," Gallagher said.
Together, the Sudbury and Voisey's Bay operations account for roughly 10 percent of global nickel supply. Prices are up 3.4 percent this year, making nickel one of the strongest performers among metals, most of which have seen double-digit percentage price declines.
Cory McPhee, a spokesman for Vale, was more cautious about a settlement at Voisey's Bay, noting that it is "probably a leap at this point" to view the tentative deal in Ontario as having an impact on talks at Voisey's Bay.
"However, we have always said it appeared to us that from the USW's perspective getting a settlement in Ontario was a first step," McPhee said. "We want to return to normal production in Voisey's Bay as well. There are no talks scheduled there, but certainly that would be our intent."
Voisey's Bay, located in the province of Newfoundland and Labrador, produced 77,500 tonnes of nickel and 55,4000 tonnes of copper in 2008, the last year of uninterrupted production.
Vale resumed partial production at Voisey's earlier this year using nonunion workers and outside contractors at an annualized rate of about 19,000 tonnes of nickel and 15,000 tonnes of copper.
The tentative deal reached between Vale and the United Steelworkers on Sunday, could bring to an end the longest strike in Sudbury's century-long mining history.
Workers at the mining and milling operations in Sudbury, along with those at a refinery in Port Colborne, went on strike on July 13, 2009, over pension, bonus and contract language issues.
The two sides declined to divulge the terms of the new five-year agreement, until workers have had an opportunity to review the terms later this week. Workers are expected to vote on the proposed deal before the end of the week.
Mediated talks between the two sides stalled last month, after the USW and Vale failed to clinch a deal due to a dispute over nine workers that were fired by the company during the strike.
In a statement, the union said the Ontario Labor Relations Board will conduct a hearing later this month to decide the fate of the nine discharged workers.
The length of the current strike in Sudbury eclipses a strike at the same operations in 1978-79, when they were owned by Inco, that lasted nearly nine months. However, the impact of that strike on the mining town was much more severe as more than 11,000 workers took part.
Vale, the world's largest iron ore miner, acquired Inco in a C$19.21 billion ($18 billion) all-cash deal in 2007. ($1=$1.07 Canadian)