Vale Announcement Long on Propaganda, Short on Investment

TORONTO, Nov. 17 /CNW/ - Vale's latest "investment" announcement continues a public-relations campaign more concerned about image than providing net benefits to Canadian communities.

"Vale's announcement today is perhaps the most cynical public relations exercise we have seen yet from this foreign corporation," said Ken Neumann, the United Steelworkers union's National Director for Canada.

"While it claims to meet its commitments under the Investment Canada Act, Vale decides to close the smelting and refining facilities in Thompson, Manitoba," Neumann said.

"This closure will eliminate a crucial value-added component of Thomson's mining operations, potentially killing more than 500 jobs and dealing a devastating blow to the community.

"This clearly demonstrates Vale's lack of commitment to Manitoba. Rather than invest in its Thomson operations, Vale opts to cut 40 per cent of its workforce and wreak more havoc on Canadian working families."

"This decision continues Vale's disastrous record since it was allowed to take over Inco Ltd. four years ago," Neumann added. "Vale has taken billions in profits from our country, while cutting hundreds of jobs and inflicting pain on Canadian communities.

"Vale's propaganda machine works overtime to deflect attention from its attacks on Canadian jobs and working standards and the ongoing labour strife it has caused in our communities.

"In Voisey's Bay, for example, Vale continues to use scabs in a strike that is now in its 16^th month. Vale's commitment to Canada apparently does not include providing its Newfoundland and Labrador workers - including many aboriginal employees - with the same collective agreement it negotiated with its Ontario workers."

Today's $10-billion investment announcement by Vale warrants further examination, the Steelworkers said.

Most of Vale's announcement consists of a combination of investments that have been imposed on the company by government, and speculative investment that may never occur, the union noted. When all of this spending is removed from the equation, Vale's actual commitment for new, voluntary investment in Canada over the next five years amounts to much less than advertised.

Vale's propaganda indicates that much of the announced investment for Canada - at least $4 billion - has not been approved and therefore may never see the light of day. This includes speculation about a potash mine in Saskatchewan that Vale says could cost $3 billion and a mine in Manitoba, which Vale says could cost $1 billion.

In reality, the lion's share of the investment Vale has committed to Canada consists of capital spending mandated by government, as opposed to the company willingly investing in its Canadian operations.

The $3-billion cost associated with new processing facilities in Long Harbour, Newfoundland and Labrador, occurred as a result of the provincial government insisting the facilities be built in the province. In fact, this requirement pre-dates Vale. It was imposed on Inco Ltd. in exchange for the right to exploit the rich Voisey's Bay mineral deposit.

As well, the investment of $1.5 billion to $2 billion to improve environmental standards at Vale's Sudbury operations was mandated by the Ontario government, as opposed to improvements willingly proposed by Vale. In fact, after the province mandated the environmental improvements, Vale lobbied for a five-year extension to the deadline to meet the new standards.

Vale's environmental practices have resulted in a legal challenge in Newfoundland and Labrador, where the company plans to dump toxic tailings into a pristine lake, rather than invest in a costlier method of tailings disposal.

For further information:

Ken Neumann, USW National Director for Canada, 416-487-1571;
Bob Gallagher, USW Communications, 416-434-2221, 416-544-5966,
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