Venezuelan Government to Mediate in Gold Mine Labor Conflict

Caracas, June 3, 2008, (venezuelanalysis.com) – The Venezuelan government announced on Tuesday that it will mediate between workers and the management of the U.S. mining company Hecla in a dispute over working conditions that has seen periodic work stoppages at the Isadora gold mine in the southeast of Bolivar state since late March.

The dispute flared up amidst a renewed wave of nationalizations this year in the cement and steel sectors. In the case of the Sidor steel plant Venezuelan President Hugo Chavez intervened directly to nationalize the company on April 9 after a long struggle by workers there.

The workers at the Isadora mine are calling for the operation to be nationalized due to “the constant violations of human rights being carried out by the management of this company.”

In addition to what they describe as “starvation wages” and dangerous working conditions, workers have denounced that they are routinely strip-searched by company security at the end of each shift to ensure that they are not smuggling gold out of the mine. In some cases they said, they were forced to play “leap frog” in the nude.

On May 2 Minister for Basic Industries and Mines (MINBAM), Rodolfo Sánz called for the cessation of all operations at the Isadora mine after hearing reports of shocking treatment of the workers there. Sánz declared that the contract granted to Hecla through the state owned mining company CVG Minerven, would be totally revised.

The mining company, 90 percent of whose earnings leave Venezuela, denies that it has violated worker’s rights.

However, three workers who presented official complaints, including photos, detailing company abuse to MINBAM and the Ministry of Labor during an assembly of workers on May 18 were subsequently dismissed without explanation two days later.

On May 23 the mineworkers blockaded Highway 10, connecting Venezuela and Brazil. Hedreman López, explained that the workers took the decision to peacefully block the highway to “demand the nationalization of this exploitative company.”

“The company extracts tons and tons of gold and pays us 390 Bs.F (US$181.39) fortnightly, and for that the workers have to put up with humiliation and abuse from the bosses,” López declared.

Argenis Medina, also a worker from Hecla, said, “We want President Chávez to come here to see the inhumane conditions and the constant violations of human rights that we have to put up with, so he can apply the same measures that he applied in Sidor.”

On May 24 Luis Herrera, president of CVG Minerven announced that Hecla’s mining contract could be revoked altogether due to the company’s violation of the human rights of the workers.

Alternatively, unofficial reports also surfaced that the company would sell the rights to the mineral deposits in Isadora to a Russian mining company Agapov.

However, today Sánz announced he would meet with workers and the management from Hecla on Thursday to negotiate the reopening of the mine under improved working conditions.

“In the case that operations are re-established, MINBAM will continue intervening in the revision of the mining contract that CVG Minerven has granted Hecla. It is a legal step that will require a minimum of six months,” he said.

The minister clarified that Hecla cannot negotiate the transfer of its deposits to another company and warned that the government would nationalize the two projects if the Russian company attempted to purchase the operations.

The policy of the government, he explained, is to investigate the possibility of a mixed company with majority state control.

Sánz also called for the company to reincorporate the three workers who were dismissed on May 20.

“They [the workers] say that they were dismissed after they had told me their opinion of the company in an assembly,” the minister said. “They must be reincorporated, because to me it appears an injustice that they were thrown out without any cause,” he continued.

The subsidiary of Hecla in Venezuela, Hecla Callao Gold Mining Company, is the biggest producer of gold in the country, through two operations, the Isadora gold mine and the La Camorra mill, which processes raw material from its mine.

The production at La Camorra contributed 3% of the transnational company’s gross profits in 2007 according to Vicki Veltkamp, Hecla vice president for investor and public relations.

Another dispute has flared up at La Camorra, where around 102 workers have been dismissed after the company claimed the reserves in the Isadora mine were in decline and it could no longer keep the mill operating at full capacity.

According to a report in Reuters today, a long awaited Mining Law, still pending approval in the National Assembly, will oblige private firms operating in the mining sector to accept new terms, such as the formation of joint companies with majority state ownership, in line with a similar Hydrocarbons Law applied to the oil sector last year.