May 31, 2016 / 6:12 PM / 2 years ago

UPDATE 1-Workers to strike at Colombia's Cerro Matoso nickel mine

(Adds comment from Cerro Matoso)

BOGOTA, May 31 (Reuters) - Union workers at Colombia’s Cerro Matoso mine, one of the world’s largest producers of ferronickel, will begin an indefinite strike on June 14 in protest of work and pay conditions, the union president said.

A strike at Cerro Matoso, owned by Australia’s South32 Ltd , could impact global nickel prices as production stalls. Miners last year went on strike at the mine for two weeks before reaching agreement on a dispute that had forced previous owner BHP Billiton to declare force majeure.

“The union has voted to strike on June 14 because of the negative attitude of the company to resolve workers’ demands,” Domingo Hernandez, president of the Sintracerromatoso union, told Reuters.

“Despite the decision to strike, we maintain an open door to dialogue. A solution to avoid the strike lies with the company.”

Workers have demanded a pay increase of 9.77 percent, Hernandez said.

Cerro Matoso said in a statement that the union has ignored the crisis sparked by the global drop in mineral prices and reduced output caused by a depletion of reserves.

“We insist that Cerro Matoso cannot take work commitments that exceed economic capacity or jeopardize the sustainability of the company,” said mine president Ricardo Gaviria, adding that the company would be negatively impacted by a strike.

The union’s demands would incur additional costs of $12 million, the statement said. Cerro Matoso reported losses of $75 million between July 2015 and March this year.

The mine, located in the northern province of Cordoba, produced 36,670 tonnes of ferronickel last year, down 11 percent from 2014.

Cerro Matoso has more than 1,200 employees, 520 of whom belong to the union. (Reporting by Luis Jaime Acosta; Writing by Helen Murphy; Editing by Alan Crosby and Bill Trott)

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