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Cablegate: Miners Strike for Better Wages in Chihuahua

VZCZCXRO0188
RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHM RUEHHO RUEHJO RUEHMC RUEHNG
RUEHNL RUEHPOD RUEHQU RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #0183/01 0241517
ZNR UUUUU ZZH
R 241517Z JAN 08
FM AMEMBASSY MEXICO
TO RUEHOT/AMEMBASSY OTTAWA 2358
RUEHC/SECSTATE WASHDC 0216
RUEHC/DEPT OF LABOR WASHDC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 MEXICO 000183

SIPDIS

SIPDIS

DEPT FOR DRL/AWH AND ILCSR, AND WHA/MEX, USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON PGOV PHUM PINR MX
SUBJECT: MINERS STRIKE FOR BETTER WAGES IN CHIHUAHUA

REF: (A) MEXICO 0126 (B) MEXICO 0013

1. SUMMARY: The month of January is proving to be a
difficult one for the National Union of Miners and
Metalworkers of the Mexican Republic (SNTMMSRM), the
country,s oldest and largest miners union. On January 11,
authorities forcibly ended a six-month old strike by union
Local 65 at the Cananea copper mine in the northwestern state
of Sonora. Cananea is the largest copper mine in Mexico. This
event was followed on January 15 by the outbreak of an
unrelated strike at the Naica lead mine in the northern
border state of Chihuahua. Unlike the strike in Cananea
mine, which has strong political overtones related to pending
criminal charges against the SNTMMSRM,s national leader (REF
A), the strike at the Naica mine appears to over straight
economic issues. The strikers from union Local 30 are
demanding a 10 percent wages increase but the mine owners are
only prepared to pay 6 percent. The GOM,s Labor Secretariat
(STPS) views the Local,s demands as excessive since they
exceed the general four percent salary increase the
government established in late December 2007 and has publicly
described the union,s position as &rigid and inflexible.8
This is fairly strong language for STPS which generally
avoids publicly criticizing any party to a labor dispute.
END SUMMARY.


CHIHUAHUA MINERS GO ON STRIKE
-----------------------------

2. On January 15, the members of Local 30 of the National
Union of Miners and Metalworkers of the Mexican Republic
(SNTMMSRM) at the Naica lead mine went on strike for better
wages. The strikers are demanding a 10 percent wage increase
but the mine owners are only prepared to pay 6 percent. The
Naica mine, which is located in the northern border state of
Chihuahua, is Mexico,s largest lead mine; Naica also
produces limited amounts of gold, silver, copper and zinc.
The Naica mine employs over 500 people of which 350 are
unionized. The remaining employees are a combination of
management staffers and over 100 persons hired on individual
work contracts.

3. The strike launched by SNTMMSRM Local 30 is different,
and relatively separate, from the long-running strike by
members of union Local 65 at the Cananea copper mine in the
state of Sonora. The strike by Local 65 at the Cananea mine
is ostensibly a labor action over unsafe working conditions
which apparently do exist. However, there are strong
indications that the real goal of the Cananea strike is to
support SNTMMSRM,s national leader, Napoleon Gomez Urrutia,
who has several criminal corruption charges pending against
him. Undoubtedly, as a part of the larger SNTMMSRN union,
the members of Local 30 are concerned about the fate of their
national leader but the strike launched by them on January 15
seems to be about purely economic issues.

STRIKING MINERS WANT BIGGER PIECE OF THE PIE
--------------------------------------------

4. The miners of Local 30 insist that their demand for a 10
percent wage increase is a fair one given the profitability
of the Naica mine. According to the Local,s calculation,
world metal prices have risen significantly in recent months
and they believe they should share in benefits arising from
this increase. In addition Local 30 is citing the fact that
the Mining Chamber of Mexico, a national commercial
association that represents mine owners, is predicting a 30
increase in mining profits for the coming year (if the
increase in world metal prices remains constant). Taking
into consideration the mining industry,s own predictions of
future profits the leadership of SNTMMSRM is arguing that the
mine workers should also benefit from increases in industry
profitability.

5. Even though the strike at the Naica mine was called
locally it is being supported by the national union. A
spokesman for the SNTMMSRM national office, Carlos Pavon,
indicated that Local 30 has a modest strike fund to help
union members supporting the work stoppage. He acknowledged
that the fund was not very large but that Local 30 would be
supported by other SNTMMSRM Locals for the duration of the

MEXICO 00000183 002.2 OF 002


strike. Media reports indicate that this is the first strike
at the Naica mine since 1993 which lasted 64 days and had a
very severe negative economic impact on the local community.


MINING OWNERS AND GOM SEE THINGS DIFFERENTLY
--------------------------------------------

6. The Naica mine is owned by the &Minera Maple8 company
which is, in turn, a part of Penoles mining group which is a
publicly traded corporation on the Mexican stock exchange.
In commenting on the negotiations between Minera Maple and
SNTMMSRN Local 30, the Director of the Mining Chamber of
Mexico, Sergio Almazan Esqueda, acknowledged the expectation
of higher industry-wide profits but argued that this
prediction had to be put in the proper context. According to
the Almazan Esqueda, the mining industry as a whole has made
significant investments in plants and exploration that
increase costs and reduce profitability but which he said the
union was not taking into account. Moreover, he urged the
union to keep in mind that for every 1000 projects industry
mine owners invest in only one of them produce profitable
results. In addition to arguing the economics of mining
operations, Almazan Esqueda also alleged that strikes like
the one at the Naica mine was part of an industry-wide
problem in which labor actions are being used to resolve
non-labor problems like the pending criminal charges against
SNTMMSRM national leader Napoleon Gomez Urrutia.

7. The Mining Chamber of Mexico Director,s arguments were
indirectly echoed by the Mexican government,s Labor
Secretariat (STPS) which condemned union Local 30,s decision

SIPDIS
to launch a strike. An official STPS bulletin on the federal
agency,s webpage pointedly underscored the difficulty of
negotiating with a union headed by the SNTMMSRM,s national
leader. The bulletin specifically called the union &rigid8
and inflexible. It also expressed the STPS,s unease over
the fact that miners union Local 30 was seeking wage increase
in excess of the general four percent salary increase the
government established in late December 2007 (REF B). Most
SNTMMSRM union Locals have accepted wage increases of 6
percent for 2008.


COMMENT
-------

8. It is fairly unusual for the STPS to use such strong
language as rigid and inflexible in an official bulletin
discussing union negotiation. In general, the STPS tends to
avoid publicly criticizing any party to a labor dispute no
matter what the officials of this GOM agency may think about
the sides involved in ongoing negotiations. It is possible
that this uncharacteristic STSP language may reflect the fact
that the strike at the Naica mine came just days after the
GOM used force against striking workers for the very first
time during the administration of Mexican President Calderon.
Given that the GOM,s disagreements with the SNTMMSRM,s
union began long before the start of the Calderon government,
it could be that Mexico,s federal labor authorities no
longer wish to engage in protracted negotiations with the
miners, union. If that is the case, then the strong
language in the STPS, official bulletin could be a message
to Local 30 that it should seriously consider moderating its
wage demands.


9. This message was cleared with AmConsul Ciudad Juarez.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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