LONDON Apr 19, 2012 (Dow Jones) -- Rio Tinto PLC (RIO) said Thursday it is willing to enter talks with labor unions regarding a collective work agreement at its Canadian Alma aluminum smelter if the talks are "reasonable."
"We have come to solutions all the time before [regarding collective work agreement], it's just about being reasonable," Rio Tinto's Chief Executive Tom Albanese told shareholders at the company's annual general meeting here.
Rio Tinto Alcan, the aluminum arm of Rio, locked out 780 unionized workers at its 438,000-ton-a-year Saguenay-Lac-Saint-Jean aluminum smelter in northern Quebec Jan. 1. Both parties had started negotiations in October to establish a new collective workers' agreement to replace one that expired Dec. 31, but failed to reach an agreement.
Albanese said there were instances of vandalism which prompted the company to lock out the workers in order to ensure the safety of all workers and the plant. The plant has been operating at a third of its full capacity since the lockout based on a workforce of 224 non-unionized workers.
He said the proposed collective agreement was unreasonable because it required that the smelter employ a minimum of 900 workers, above and beyond the current number of workers at the plant.
"It is something that we haven't seen anywhere else" in negotiations before, Albanese said.
Another issue at stake was the union's request to limit or prohibit Rio from using sub-contractors for non-core activities.
A member of the United Steelworkers who attended the annual general meeting in order to represent the locked out workers said the vandalism allegations were unfounded and the lockout was illegal. He called on Rio Tinto to return to the negotiating table.
The locked-out members of the United Steelworkers were supported in this action by the U.K. union Unite, the London Mining Network and three global union federations, the International Federation of Chemical, Energy, Mine and General Workers' Unions, International Metalworkers' Federation and International Transport Workers' Federation.
A Rio Tinto spokesman said that in the last 16 years, this was the only conflict that Rio Tinto Alcan has encountered in its operations globally, adding that it had reached successful conclusion on all its other collective labor agreements, except for this one.
Deutsche Bank said in a note that it believes the lockout could last for all of 2012.