Reply to Roger Agnelli: It Is Sudbury That Is Sustainable and Monopoly Right That Is Not!

Posted By Sudbury_MLPC

7 hours ago

Reply to Roger Agnelli:

"Sudbury is Vale's highest-cost operation and it's not sustainable ... If we hadn't bought Inco, perhaps it wouldn't now be even alive," said Roger Agnelli, CEO of Vale SA, days before a July 12 deadline to negotiate a new collective agreement between Vale and 3,300 production and maintenance workers. "We have already seen several companies go bust because of holes in their accounts caused by their pension funds ... We want the best for the company and the employees. The company must have financial health," Agnelli added.

What arrogance! How history is distorted when looked at through the magic glasses of monopoly right. According to Agnelli, it is the workers' pensions and bonuses that are the cause of the economic crisis facing Vale and the world of the mining supermajors. Therefore new arrangements whereby Inco workers are to give up their claims on the wealth they produce must be introduced into labour relations in Vale Inco's Sudbury operations.

Sudbury is one of the premier mining camps in the world. Over a century and a quarter, hundreds of billions of dollars of social product have been dug from its mines and milled, smelted and refined into more than a dozen metals including nickel, copper, cobalt, gold, silver and platinum group metals. A strategic metal, Sudbury nickel fuelled great fortunes in Pittsburgh, New York, London and Toronto and provided the means for tens of thousands of Sudbury miners to build their homes and raise their families. Proven, indicated and inferred ore reserves in Sudbury are sufficient for another century of operations at current levels of production. How, Mr. Agnelli, is Sudbury not sustainable? The ore is thousands of feet underground. It isn't going anywhere until the labour of Sudbury miners is applied to it, whatever you tell the press in Brazil. As the producers of the wealth in the Sudbury mines, Sudbury miners justly have first claim to that wealth.

According to Vale and Agnelli, Vale Inco's Sudbury operations have an unfunded pension liability of $725 million and that therefore the pension plan must be changed from a defined benefit to a defined contribution plan, placing the risk of the pension on the backs of the workers. It is only three years since Vale SA purchased Inco Ltd. for $19 billion at a time when the price of nickel had spiked to an all-time high of almost $25 per pound. In such a purchase, the buyer performs due diligence. It examines the assets and the liabilities. Vale was perfectly aware of Inco Ltd.'s pension obligations and in agreeing to buy Inco Ltd., Vale agreed to meet Inco Ltd.'s pension commitments. Vale now has no justification to weasel out of the commitments that Vale made when it purchased Inco Ltd.

The nickel bonus is another example of the historical distortions of Vale and Agnelli. When it was introduced in 1985, the nickel bonus was actually concessionary as it settled for a promise of a variable payment in the future as opposed to a definite payment in the present. However, the nickel bonus became part of the Inco culture, providing a few hundred dollars extra in the eighties and nineties and only becoming a significant supplement to worker's regular wages in the recent years of the price spike. With the drop in the price of nickel over the past year, the nickel bonus has returned to historical levels. Vale SA wants to minimize the claim of the Sudbury workers on the surplus value that they produce and ensure that the owners of capital receive the complete benefit of an increase in revenues caused by an increase in the price of nickel.

Vale SA and Roger Agnelli, Xstrata PLC and Mick Davis and the other mining monopolies emerging as supermajors (BHP Billiton, Rio Tinto and Anglo American) are in crisis. The commodities boom could not and did not last forever. The market capitalization of the leading forty global mining monopolies decreased 62 percent in 2008 and Vale and Xstrata have been left with huge debts as a result of buying Inco and Falconbridge at the top of the market. Over half a decade, corporate insiders such as Brascan, hedge funds, bankers, lawyers, accountants and speculators magically transformed $2 billion companies into $20 billion enterprises. Now the bubble has burst and the Vale and Xstrata monopoly groups are living in a world where each is either predator or prey. They are desperately trying to survive and emerge supreme. It is this system of monopoly right that is not sustainable. Resistance to unfettered monopoly right is just!


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Published by the Sudbury Marxist-Leninist Party Club. For more coverage of the Vale Inco workers' strike, please visit http://www.cpcml.ca/Tmld2009/D39136.htm