MINERS STRIKE FOR BETTER WAGES IN CHIHUAHUA

UNCLAS SECTION 01 OF 02 MEXICO 000183 SIPDIS SIPDIS DEPT FOR DRL/AWH AND ILCSR, AND WHA/MEX, USDOL FOR ILAB E.O. 12958: N/A TAGS: ELAB ECON PGOV PHUM PINR MX SUBJECT: MINERS STRIKE FOR BETTER WAGES IN CHIHUAHUA REF: (A) MEXICO 0126 (B) MEXICO 0013 ¶1. SUMMARY: The month of January is proving to be a difficult one for the National Union of Miners and Metalworkers of the Mexican Republic (SNTMMSRM),the country,s oldest and largest miners union. On January 11, authorities forcibly ended a six-month old strike by union Local 65 at the Cananea copper mine in the northwestern state of Sonora. Cananea is the largest copper mine in Mexico. This event was followed on January 15 by the outbreak of an unrelated strike at the Naica lead mine in the northern border state of Chihuahua. Unlike the strike in Cananea mine, which has strong political overtones related to pending criminal charges against the SNTMMSRM,s national leader (REF A),the strike at the Naica mine appears to over straight economic issues. The strikers from union Local 30 are demanding a 10 percent wages increase but the mine owners are only prepared to pay 6 percent. The GOM,s Labor Secretariat (STPS) views the Local,s demands as excessive since they exceed the general four percent salary increase the government established in late December 2007 and has publicly described the union,s position as &rigid and inflexible.8 This is fairly strong language for STPS which generally avoids publicly criticizing any party to a labor dispute. END SUMMARY. CHIHUAHUA MINERS GO ON STRIKE -------------- ¶2. On January 15, the members of Local 30 of the National Union of Miners and Metalworkers of the Mexican Republic (SNTMMSRM) at the Naica lead mine went on strike for better wages. The strikers are demanding a 10 percent wage increase but the mine owners are only prepared to pay 6 percent. The Naica mine, which is located in the northern border state of Chihuahua, is Mexico,s largest lead mine; Naica also produces limited amounts of gold, silver, copper and zinc. The Naica mine employs over 500 people of which 350 are unionized. The remaining employees are a combination of management staffers and over 100 persons hired on individual work contracts. ¶3. The strike launched by SNTMMSRM Local 30 is different, and relatively separate, from the long-running strike by members of union Local 65 at the Cananea copper mine in the state of Sonora. The strike by Local 65 at the Cananea mine is ostensibly a labor action over unsafe working conditions which apparently do exist. However, there are strong indications that the real goal of the Cananea strike is to support SNTMMSRM,s national leader, Napoleon Gomez Urrutia, who has several criminal corruption charges pending against him. Undoubtedly, as a part of the larger SNTMMSRN union, the members of Local 30 are concerned about the fate of their national leader but the strike launched by them on January 15 seems to be about purely economic issues. STRIKING MINERS WANT BIGGER PIECE OF THE PIE -------------- ¶4. The miners of Local 30 insist that their demand for a 10 percent wage increase is a fair one given the profitability of the Naica mine. According to the Local,s calculation, world metal prices have risen significantly in recent months and they believe they should share in benefits arising from this increase. In addition Local 30 is citing the fact that the Mining Chamber of Mexico, a national commercial association that represents mine owners, is predicting a 30 increase in mining profits for the coming year (if the increase in world metal prices remains constant). Taking into consideration the mining industry,s own predictions of future profits the leadership of SNTMMSRM is arguing that the mine workers should also benefit from increases in industry profitability. ¶5. Even though the strike at the Naica mine was called locally it is being supported by the national union. A spokesman for the SNTMMSRM national office, Carlos Pavon, indicated that Local 30 has a modest strike fund to help union members supporting the work stoppage. He acknowledged that the fund was not very large but that Local 30 would be supported by other SNTMMSRM Locals for the duration of the MEXICO 00000183 002.2 OF 002 strike. Media reports indicate that this is the first strike at the Naica mine since 1993 which lasted 64 days and had a very severe negative economic impact on the local community. MINING OWNERS AND GOM SEE THINGS DIFFERENTLY -------------- ¶6. The Naica mine is owned by the &Minera Maple8 company which is, in turn, a part of Penoles mining group which is a publicly traded corporation on the Mexican stock exchange. In commenting on the negotiations between Minera Maple and SNTMMSRN Local 30, the Director of the Mining Chamber of Mexico, Sergio Almazan Esqueda, acknowledged the expectation of higher industry-wide profits but argued that this prediction had to be put in the proper context. According to the Almazan Esqueda, the mining industry as a whole has made significant investments in plants and exploration that increase costs and reduce profitability but which he said the union was not taking into account. Moreover, he urged the union to keep in mind that for every 1000 projects industry mine owners invest in only one of them produce profitable results. In addition to arguing the economics of mining operations, Almazan Esqueda also alleged that strikes like the one at the Naica mine was part of an industry-wide problem in which labor actions are being used to resolve non-labor problems like the pending criminal charges against SNTMMSRM national leader Napoleon Gomez Urrutia. ¶7. The Mining Chamber of Mexico Director,s arguments were indirectly echoed by the Mexican government,s Labor Secretariat (STPS) which condemned union Local 30,s decision SIPDIS to launch a strike. An official STPS bulletin on the federal agency,s webpage pointedly underscored the difficulty of negotiating with a union headed by the SNTMMSRM,s national leader. The bulletin specifically called the union &rigid8 and inflexible. It also expressed the STPS,s unease over the fact that miners union Local 30 was seeking wage increase in excess of the general four percent salary increase the government established in late December 2007 (REF B). Most SNTMMSRM union Locals have accepted wage increases of 6 percent for 2008. COMMENT -------------- ¶8. It is fairly unusual for the STPS to use such strong language as rigid and inflexible in an official bulletin discussing union negotiation. In general, the STPS tends to avoid publicly criticizing any party to a labor dispute no matter what the officials of this GOM agency may think about the sides involved in ongoing negotiations. It is possible that this uncharacteristic STSP language may reflect the fact that the strike at the Naica mine came just days after the GOM used force against striking workers for the very first time during the administration of Mexican President Calderon. Given that the GOM,s disagreements with the SNTMMSRM,s union began long before the start of the Calderon government, it could be that Mexico,s federal labor authorities no longer wish to engage in protracted negotiations with the miners, union. If that is the case, then the strong language in the STPS, official bulletin could be a message to Local 30 that it should seriously consider moderating its wage demands. ¶9. This message was cleared with AmConsul Ciudad Juarez. Visit Mexico City's Classified Web Site at http://www.state.sgov.gov/p/wha/mexicocity and the North American Partnership Blog at http://www.intelink.gov/communities/state/nap / GARZA