Rio Tinto Group RIO is reportedly in negotiations with workers at its Oyu Tolgoi copper operations in Mongolia to prevent further industrial action.
The move follows a previous strike in May, prompted by a significant wage reduction, reported Reuters.
Notably, changes to Mongolia’s Labor Law, effective from the beginning of 2022, led Rio Tinto to recalculate employee allowances.
According to the non-governmental organization OT Watch, which is in contact with the mine workers, wages have decreased by up to 80%.
OT Watch Director Sukhgerel Dugersuren told Reuters, “A request to start negotiations was sent and OT is to reply by July 5, 2024. Another strike is possible if 70% of key demands on wages and 50% of other demands are not met.”
“The key demand of workers is to bring wages to similar levels paid for the same type of work performed in other Rio Tinto mines.”
He added that the workers were being paid a “miserable $1,596 per month for work far from home”. According to government data, the average monthly mining salary in Australia is A$10,413 ($6,919), which the report highlighted.
According to OT Watch, during the strike from May 10-17, all open pit and underground mining operations were halted. Workers reported that this stoppage may have caused some structural issues underground.
Rio Tinto commented that, “The stand-down did not affect mine operations and there was no material impact to mine production.”
Also Read: Rio Tinto Invests $143M in Low-Emission Steel Research And Development
In March last year, Rio Tinto began underground operations at Oyu Tolgoi and scaling up production to reach approximately 500,000 tons of copper annually starting in 2028.
Last month, Rio Tinto stated that Serbia is poised to approve the development of Europe’s largest lithium mine. The Jadar project, suspended in 2022, could start production by 2028, providing Europe with metal much needed for its electric vehicle (EV) industry.
Investors can gain exposure to the stock via VanEck Steel ETF SLX and NEOS ETF Trust Mast Global Battery Recycling & Production ETF EV.
Price Action: RIO shares closed higher by 0.73% at $66.41 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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