Inco workers ratify strike-ending contract

Gary Park, Petroleum News Calgary correspondent

Unionized workers at Inco’s Ontario nickel and copper operations ended a three-month strike by accepting a new contract that will add US$11.4 million a year to Inco’s base cost.

The world’s second-biggest nickel producer said its inventories are now “extremely low” and it will not be able to resume filling all its contracts for at least another six weeks until the supply pipeline is filled up.

The agreement covers 3,450 employees, with workers in Sudbury voting 62 percent to accept the offer and those at Port Colborne ratifying the deal by 92 percent. The package includes wage and pension increases, a signing bonus and preserved health-care benefits. Inco has calculated that the increases will add 2.4 cents to every pound of metal produced — a settlement Michael Fowler, an analyst with Desjardins Securities, described as an “expensive contract” for the company in putting a “sell” recommendation on the stock.

He also estimated the strike will have cost Inco about US$8.5 million, or 45 cents per share, excluding lost sales.

During the strike, which trimmed global nickel production by 9 percent, the spot price hit a three-year high of US$4.39 a pound on the London Metal Exchange, adding to a 35 percent climb in the past year.