Icelandic workers to block Rio Tinto aluminium exports over wage dispute

Dispute around cheaper contractors used at plant
||Last Updated: 02/17/2016

REYKJAVIK (Reuters) — Workers at Rio Tinto's unit in Iceland voted to block exports of aluminium from the Hafnarfjordur plant in the southwest of the North Atlantic island due to a long-running dispute over wage contracts.

The workers, members of the Hilf trade union, said late on Tuesday that they would stop loading aluminium on vessels from Feb. 24.

Rio Tinto's Hafnarfjordur plant has an annual capacity of 185,000 tonnes and accounts for a quarter of Iceland's exports, according to the company's website. The strike comes as the country is only just recovering from its 2008 financial meltdown and has yet to fully lift capital controls.

A bigger strike on the same issue, which would have closed operations at the smelter, was narrowly avoided in December over fears that Rio Tinto would use the shutdown as a means of getting out of Iceland altogether.

Rio, the world's No. 2 miner, is slashing costs worldwide after being hard hit by the global slump in commodities and reported a net loss for last year.

It employs 450 full-time workers at the Iceland plant and the dispute hinges on cheaper contractors that Rio uses at the plant and whom employees fear will eventually take theirjobs.

A collective agreement with workers ran out at the end of 2014 and since last year several trade unions have used a state conciliation officer to try to resolve the dispute.

"We have continuously been trying to press for a wage contract and that has not been successful. We have offered them a one-year, two-year, three and even a four-year contract but they refuse," Kolbeinn Gunnarsson, chairman of the Hilf trade union told Reuters.

A spokesman at the London office of Rio Tinto did not have an immediate comment on the dispute or the impact the workers' action might have on its operations.

Gunnarsson said the union wanted to ensure that contract workers were not paid less than Rio employees.

"They say we don't want contractors to come and work but that is not true," he said. "Every day there are 50-100 contractors working here but our demand is that it will be part of the contract that these contractors will not have a lower salary than the workers of Rio Tinto."

Due to Iceland's geography -- lying atop the mid-Atlantic Ridge that separates the European and North American tectonic plates -- the island has huge geothermal and hydro energy resources, much more than its 330,000 people need.

As a means of earning revenue from that energy, Iceland invited power-hungry aluminium smelters to the country several decades ago.

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