CONAKRY, (Reuters) – Production at RUSAL’s Friguia alumina refinery in Guinea fell to 40 percent of capacity as a strike rumbled through its third day, the Russian aluminium firm said yesterday.
Workers at the West African plant, which employs more than 1,000 people and has capacity to refine enough raw material bauxite to produce 640,000 tonnes of alumina per year, went on strike on Wednesday to demand higher salaries.
“The refinery is now operating at minimal capacity — 40 percent of its normal capacity,” RUSAL said in a statement. “Negotiations to resolve the situation at Friguia are underway,” it said, without giving details of talks’ status.
RUSAL, the world’s biggest aluminium producer, said in February it would cut annual aluminium output by 11 percent, alumina output by 30 percent and staff by 5 percent as part of a cost-cutting programme.
Guinea’s mines ministry shut down five of RUSAL’s local subcontractors on Friday, a decision the firm said it would challenge.
Workers want the firm to triple their salaries to the local equivalent of $300 per month from $100, a demand the world’s biggest aluminium producer described on Thursday as “unacceptable and economically groundless”. Unions rejected RUSAL’s offer of a $20 per month increase for technical and administrative staff and $2 per month for labourers, a RUSAL employee in Guinea said, speaking on condition of anonymity. “Salary negotiations have not yet succeeded,” the employee said.
Benchmark prices of aluminium traded in London have halved in the past twelve months, and analysts say an oversupplied global market could make further price falls likely as demand for industrial metals plummets as a consequence of the world financial crisis.
A military junta that seized power in Guinea in December has threatened to review and potentially cancel contracts international mining companies signed with the previous administration.
Though rich in gold and iron ore as well as bauxite, Guinea remains deeply impoverished, and in the past Guineans have targeted resources firms in protests against lack of water and electricity.
