Altan San Securities - Mongolia Investment - Boroo disputes “a test case” for the mining industry

Boroo disputes “a test case” for the mining industry

Mineweb reports that the ongoing labor dispute at the Boroo gold mine may prove a test case for labor negotiations for the Mongolian mining industry. In an interview with the Web-based international mining publication, Centerra Vice President , Investor Relations John Pearson said Boroo's labor problems began after Ivanhoe laid off workers and Boroo let go of the contract workers who had finished building the mine's heap leach pad in June 2008.

Discussions began between the local Boroo Trade Union and Boroo management in the fall of last year. However, things heated up politically after a national trade union organization joined the talks with the aim of increasing the pay of all Mongolian miners. Eventually, Pearson said, redundancy pay and mine closure bonuses were also raised by the national union, issues which Centerra Gold says are unreasonable. Although Centerra's collective bargaining agreement expires on January 31 next, unionized employees initiated a work stoppage on May 26, an action Centerra asserts is illegal.
Mining and milling have been temporarily suspended as the labor negotiations plod along. In Mongolia, contract negotiations take longer because -- since the Mongolians stand by their commitments once they are made -- they are scrupulously careful as to the wording of such agreements. Boroo started production in 2004 and is estimated to have 800,000 ounces of gold reserves remaining. While Boroo is located in a remote area of Mongolia, the mine site enjoys good access to a highway and a railway. The Gatsuurt exploration property, located 35 km from the Boroo mine, contains a number of satellite deposits with ore that can be processed in the Boroo operation, which plans to add a bio-oxidation circuit. Because of the satellite deposits, Pearson estimates that Boroo and Gantsuurt offer another decade of mine life, yielding 200,000 ounces of gold.

Source: www.news.mn

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