October 3, 2017 / 4:21 PM / 18 days ago

Striking workers at Quebec zinc plant reject contract

Oct 3 (Reuters) - Striking workers at North America’s second-largest zinc processing plant, owned by the Noranda Income Fund, have rejected a wage and pension offer from the company, Noranda and the union representing workers said on Tuesday.

Ninety-seven percent of the 371 workers who have been on strike at the facility in Quebec for eight months rejected the offer, the United Steelworkers of America union said in a statement.

The vote comes as prices for zinc, a metal used to rust-proof steel, hit 10-year highs for the second day on Tuesday on worries over production outages in China.

London zinc prices have more than doubled since the beginning of 2016 on tightening supply after a flurry of global mine closures.

The Quebec plant produces refined zinc metal and various by-products from zinc concentrates. It is operated and managed by Canadian Electrolytic zinc, a subsidiary of global miner and trader Glencore Plc. Glencore’s Canada unit indirectly owns 25 percent of the Fund and is its biggest unitholder.

“We are disappointed that our employee bargaining unit rejected what we believe to be a fair offer,” Eva Carissimi, President and Chief Executive Officer of Canadian Electrolytic Zinc, said in a statement.

She said the company’s offer included improvements in pension rates, early retirement for around 100 employees over the next five years, as well as wage increases.

The company offered its employees more or less the same contract that provoked the strike in the first place, United Steelworkers representative Luc Julien said in a statement.

Noranda has been trying to reduce costs, notably pensions, at the plant against the backdrop of a tight zinc concentrate market. Lower mine supply has pushed down treatment charges - the fees that smelters charge to process ore into zinc - to historic lows.

“Eligible” employees in management and supervisory roles continue to operate the plant, which Noranda said in March was running at 50 to 60 percent of normal levels. Typical annual zinc production at the plant is 270,000 to 275,000 tonnes. (Reporting by Nicole Mordant in Vancouver; Editing by Susan Thomas)

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