Workers In Vale’s Sudbury Mines Are Right To Strike

June 10, 2021

Vale's rhetoric of "south-south solidarity" is meaningless. Like all corporations, the company pursues profit above all else.

As of midnight on June 1, the members of United Steelworkers (USW) Local 6500 at Vale (formerly Inco) mines in Sudbury, Ont., are on strike. 

The union local’s bargaining team had previously reached a tentative agreement with the employer and unanimously recommended it to the members. However, in a collective act of defiance, 70 per cent of rank-and-file members voted to reject what many characterized as a concession-riddled contract. The bargaining unit also includes the 100 or so production and maintenance workers of USW 6200, in Port Colborne, Ont. 

The employer claims that, “The company’s offer, and the union bargaining team’s endorsement of that offer, reflected months of hard work and commitment on both sides and a sincere demonstration to favourably conclude negotiations.” Workers clearly thought otherwise. Judging by what the union has reported of the details of the proposed deal, those who voted it down were right to do so. 

In this round of bargaining, Vale sought to remove retiree healthcare benefit coverage for anyone hired on or after June 1 of this year, to raise the employee deductible on prescription drug coverage and to eliminate full over-the-counter drug coverage — continuing a pattern of slowly chipping away at what remains of the package of union benefits secured through decades of class struggle at the mines in Sudbury. 

The rejected contract would have made very minor pension payment and benefit increases for retirees with a defined benefit pension plan and at least 30 years of employment. The catch here is that defined benefit pension plans are in the process of being entirely eliminated. One of Vale’s first orders of business when it arrived in Sudbury over a decade ago was to end these guaranteed pension plans for all new hires and replace them with “defined contribution” plans, which are basically RRSPs with matching employer contributions. 

Employers — particularly those with formerly strong industrial unions — have been in a decades-long battle to rid themselves of these pension commitments and push the risks of retirement onto individual workers. For workers at Vale who are stuck with a defined contribution plan, the proposed contract offered only the opportunity to make additional “unmatched” yearly contributions. 

When it comes to wages, the contract was even more insulting. The tentative agreement contained across-the-board wage increases of only 0.5 per cent in the first two years of the contract, followed by 1 per cent increases in the remaining three years. That’s a 4 per cent wage increase over five years, well below the rate of inflation. Rather than decent wage increases, Vale offered a one-time payment of $2,500 (supposedly in recognition of the impacts of COVID-19 at the mines) and a signing bonus of $3,500. Burying low wage increases below upfront bonuses has become a persistent employer obfuscation tactic, one for which the media frequently falls in its sub-par coverage of labour. 

Although the union was able to make some bargaining gains around vision coverage, lengthening bereavement leave and enhancing the disability payment plan, members clearly found the proposed contract wanting. Reflective of the strong sense of intergenerational solidarity in a community where elder family members are often former miners, current union members seem to be especially angered at the company’s attempt to impose cuts and hardship on retirees.

This is the first time that USW 6500 has been on the picket lines since a bitter, yearlong strike in 2009-10, precipitated by Vale’s bombastic 2006 arrival in Sudbury and the deep concessions it tabled in its first round of collective bargaining in 2009. 

Vale acquired the iconic U.S.-Canadian mining multinational Inco in 2006 in a highly contested foreign acquisition which took place amid a rush of foreign investment into Canada. The resource boom of the early-to-mid 2000s saw the stock valuations of Canadian resource companies soar, which produced a wave of mergers, takeovers and acquisitions. At the time, economist Jim Stanford characterized this foreign direct investment and growth of the resource sector, with its attendant ‘staples dependence’ and economic instability, as Canada going “back to the future.”   

The economic bonanza of the mid-2000s commodity boom eventually came to an abrupt end, with the 2008-09 financial crisis and the subsequent Great Recession. The strike in 2009-10 played out in this context, with Vale, despite remaining highly profitable, seeking to utilize the crisis to restructure its newly acquired Canadian operations. 

After the longest work stoppage in the region’s history, the strike ended with workers making considerable concessions to their new Brazilian boss, including a two-tiered pension system, a growth in “contracting-out” jobs to non-union service and supply firms and a strict cap on the popular “nickel bonus,” which rewards workers with additional percentage-based pay when the resource rises above a specified price. 

Although miners in Sudbury have a long history of trade union militancy and strike action, the 2009-10 strike was in many ways like no other. Their previous employer, Inco, was a ruthless global corporation, but Vale is simply larger, has deeper pockets and is willing to spend (as well as liberally use the courts) to crush labour. 

The context of class struggle in Sudbury has also changed appreciably since the mid-twentieth century when the Steelworkers were at their height of power in the region. In the mid-1970s, Inco employed nearly 20,000 USW 6500 members. Following an eight-month strike in 1978-79, the company pursued a concerted program of technical innovations and automation, which over a decade reduced the workforce to around 6,500. By the 2009 strike, the 3,300 union members who remained faced a mining supply and service sector largely made up of non-union workers, often performing work formerly done by union members. 

As well, miners in Sudbury are now far more integrated into global supply chains than they previously were. In the mid-twentieth century, Inco’s operations in Sudbury produced the vast majority of world nickel, holding near monopoly power over the extraction of this precious metal and its price. Relative protection from price competition also allowed union members to fight for and win considerable gains. With vast operations in dozens of countries, Vale is more able to spread its financial risks around while waging war on workers. 

However, this by no means suggests that unionized miners in Sudbury are strategically weak. Vale’s Sudbury’s operations still represent nearly half of its total Canadian output. Vale also remains, despite the slow deindustrialization of the mines, the largest employer in the city, directly employing approximately 4,000 people in Sudbury, around 2,450 of whom are production workers in the Local 6500 bargaining unit now on strike. The operations currently halted include five mines, a mill, a smelter and a refinery, all part of one of the largest mining complexes in the world which produces huge quantities of nickel, as well as copper, cobalt, gold, and silver. 

Vale has plans to make millions of dollars in capital investments to expand its operations in Sudbury, including a joint venture with Glencore to develop ore reserves on the boundaries of Vale’s current Victor Mine Project and Glencore’s Nickel Rim South Mine, two open pit mines expected to open in 2024 and 2025 with five- and 10-year life spans, and an extension of the Copper Cliff Mine that will necessitate an additional 270 jobs.

Having production in Sudbury halted is thus a major economic hit for the employer. 

Yet, the latest breakdown of bargaining and strike action at Vale in Sudbury fit within a pattern of anti-union, profit-at-all-costs business practices typical of this multinational conglomerate around the world. Vale is infamous for its environmental destruction and aggressive approach to labour relations, as well as its corporate strategy of consolidation and monopolization, which has allowed it to exercise considerable control over global resource supplies, mining-related infrastructure, and mining labour markets. Vale’s impact has led activists to label it “the worst company in the world.” 

In many respects it would seem that the veneer of “south-south solidarity” in which Vale previously wrapped itself has begun to wear thin. 

A formerly state-owned enterprise privatized in 1997, Vale and its top executives had strong ties to former left populist president, Lula da Silva and the Workers’ Party in Brazil. Its expansion into countries of the Global South, particularly in Africa, was frequently accompanied by pronouncements that capital from these oppressed nations would encourage human development rather than extract without regard for local populations as the West had. The past two decades have given every indication — in countries of the Global South and North — that capital comes with one imperative, no matter its national origins: profit. 

Vale workers around the world have far more in common with one another than they do with their bosses. 

Prior to the strike, USW 6500 expressed that they expected to see movement from the employer at the bargaining table after the latter had agreed to a one-year contract extension in May 2020 amid the uncertainty of COVID-19. Production continued apace throughout the pandemic, despite coronavirus outbreaks at Sudbury Vale worksites. With the company sitting on record profits, nickel prices rising, increased demand for electric vehicle batteries and signs of broader economic recovery, workers rightly expected far more than a measly 4 per cent wage increase over five years and some minor benefit enhancements in a contract otherwise laden with concessions. 

Once again, workers will have to struggle for every gain.