Rio Tinto in talks to avert strike at Mongolian copper mine | WKZO | Everything Kalamazoo

MELBOURNE (Reuters) – Global mining giant Rio Tinto is negotiating with workers at its Oyu Tolgoi copper plant in Mongolia to avert further industrial action over sharp wage cuts that led to an earlier strike in May.

Rio Tinto began underground mining at Oyu Tolgoi, one of the world’s largest copper-gold deposits, in March last year and plans to ramp up production to around 500,000 tonnes of copper per year from 2028.

Copper production would be worth around $5 billion a year at current prices. The price has fallen from a record high of almost $11,000 a ton in May to below $10,000 a ton.

Changes in Mongolian labor law that came into effect in early 2022 prompted Rio Tinto to recalculate employee allowances.

According to the non-governmental organization OT Watch, which is in contact with the miners, wages have fallen by up to 80 percent.

“A request to start negotiations has been sent and OT must respond by July 5, 2024. Another strike is possible if 70% of the main wage demands and 50% of the other demands are not met,” OT Watch director Sukhgerel Dugersuren told Reuters by email.

“The workers’ main demand is to raise wages to the level paid for the same type of work in other Rio Tinto mines,” OT Watch said in a briefing seen by Reuters, adding that workers were paid “a paltry $1,596 a month” for working far from home.

For comparison, according to government figures, the average monthly salary of an Australian miner is 10,413 Australian dollars (6,919 US dollars).

During the strike from May 10 to 17, workers said all open-pit and underground mining operations were halted, which may have caused some structural problems underground, OT Watch said.

“The strike had no impact on mine operations and there was no material impact on mine production,” Rio Tinto said, adding that the strike was limited to a “small group of employees” who were “trying to understand the impact of changes in average salary components.”

“Talks are ongoing and it is expected that a new collective agreement will be negotiated in the future,” the miner added.

(1 US dollar = 1.5049 Australian dollars)

(Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips)