Why do Social Democrats do what they do?

August 27, 2009

SUDBURY MINERS TAKE ON A BIG FOE, By Sam Hammond, Chair of the Central Trade Union Commission, Communist Party of Canada, People's Voice, August 09


(The following article is from the August 1-31, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)



VALE INCO, a subsidiary of Companhia Vale do Rio Doce (CVRD), was founded by the Brazilian government in 1942. Just seven years later, it was responsible for over 80% of Brazilian iron ore exports. As a publicly owned company, CVRD had access not only to government capital but to all the vast resources of Brazil. By 1970 CVRD was the major stakeholder of the Carajas Mine, which still has reserves of 1.5 billion tones of iron ore, and had become the biggest exporter of iron ore in the world. During its time of public ownership CVRD (Vale) had developed ownership and investment in transportation (railroads), built ports for the export of ore, and branched out into hydro electric and steel.


In 1997 the Brazilian federal government, in a much disputed political decision, allowed the privatization of Vale. The company was delivered to the lusting hands of the "Brazil Consortium" formed and led by the National Steel Company (CSN). This privatization of course transferred huge profits from the public purse to the bank accounts of Brazil's wealthy investors. It also gave considerable geography and access to natural wealth that was previously controlled by a public company into the hands of a private industrial/investment cabal.

Between 2000 and 2007 the huge and varied holdings of Vale were sold off. The company consolidated itself using $4.9 billion of its now privatized capital to purchase outright most of its competitors, which gave it ownership of 85% of Brazil's iron ore and virtual 100% ownership of all Brazilian iron ore exports. The consolidation of Vale into a mining-only company set the stage for Vale to release itself from its dependency on the price of iron ore and to diversify into non-ferrous metals.

In 2006 Vale acquired Inco, Canada's second largest mining company, paying $17.7 billion in cash and assuming Inco's $1.2 billion in debt. This was a major part of the transfer of Canadian extraction, manufacturing, transportation, energy and forest industries into foreign ownership and control, a process very advanced but not yet complete. With the acquisition of Inco, Vale boosted the output of non‑ferrous metals to 34% of its world output and broke its dependency on the iron ore market, although iron ore is still 64% of its business.

Just prior to the Inco grab, Vale's largest customer, Arcelor-Mittal (the worlds largest steel producer), purchased Canada's second largest steel mill (Dofasco) located next door to the largest (Stelco) which was soon consumed by U.S. Steel. These three purchases passed a huge part of the Canadian economy into foreign hands, allowed access to cheap Canadian energy, and gave control of iron ore and precious metal mining to South American, Eurasian and U.S. capital.

Vale owns six mines in the greater Sudbury area, a refinery in Port Colborne, Ontario, two mines in Manitoba, and the very rich Voisey's Bay mine in Newfoundland/Labrador. They have made more profit in Canada in the last two years than Inco made in the last ten years of ownership. They have launched what can only be described as an attack, not only on the Steelworkers in Sudbury and Port Colborne, but on the communities that depend on the wages and benefits of these workers for economic sustenance and stability.

Under the guise of the current economic crisis, Vale has attacked the "Nickel Bonus", which is important to even out the effect of world market prices that dictate the level of mining activity or lay‑offs, directly affecting the yearly income of miners. Vale demands concessions on contracting out, and introduction of a two‑tier pension program - including switching to a defined contribution plan that would become a money maker for the company and condemn retirees to lives of dependency on international finance capital, the architects of the present global crisis debacle. Vale wants to interfere with the Cost of Living Adjustment (COLA) by refusing to roll it into the base hourly rate annually, thus effectively freezing wage rates so the COLA becomes a transient add‑on that does not affect pension programs, holiday pay, overtime rates or any other program that is based on wages.

All this sounded familiar to the striking civic workers in Toronto and Windsor, where municipal administrators must have attended the same labour relations classes as the corporate yap dogs of the global neo‑cons. Vale offers the Steelworkers contracting out, two‑tiered wages and pensions, using the global crisis as an excuse to attack future generations of our youth, weaken our unions, ruin our economy and run with the profits to offshore low wage enterprises and "money as a commodity" financial investments.

The municipal leaders attacking CUPE workers offered the same cup of hemlock. But here there is no surplus value, only acquiescence with the neo‑liberal agenda that impoverished our cities in the form of tax cuts to the corporations while cutting transfer payments to the provincial and municipal governments. The recipients of the tax cuts include the foreign based monopolies like Vale. So the monopolies prosper at the expense of the municipalities (where 90% of our population lives), while municipal leaders react to a poverty of government funding by attacking the wages and pensions of public sector workers. Not satisfied with super profits and low taxes, the monopolies attack private sector workers for a double whammy of profit to invest in the global financial casinos.

Sudbury miners, whether the CAW descendants of the Mine Mill and Smelter Workers or the presently embattled Steelworkers, have a reputation for standing firm in the face of adversity. The militancy of these workers, the massive support for their leadership and their ability to rouse the entire community, can win against Vale and can recruit global solidarity with international labour. Vale is a foreign corporation trying to impose its agenda on Canadian workers.

A Steelworkers victory in Sudbury and Port Colborne will have a strengthening effect on all public and private sector workers standing against the same drive to impose two-tiered injustice for the future generation and a demeaning loss of quality‑of‑life for the present. In the environment of a vicious attack on Ontario Autoworkers and the foreign-rigged tragedy of Hamilton Steelworkers, the working class in Ontario very badly needs to win.

The Ontario Federation of Labour cannot remain relatively passive. It must lead a massive campaign to recruit public support for these strikes. The OFL should welcome, without conditions, the re‑entry of the CAW, whose militancy and organization could be a decisive factor in the emerging solidarity and labour unity.

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