Mozambique strike back on

The Mozal plant is one of the biggest foreign investments in Mozambique

Attempts to resolve the strike over pay at the Mozal aluminium plant in Mozambique have failed.

The union called off the strike on Tuesday, in the understanding that disciplinary action against the striking workers had been dropped.

However, Billiton - Mozal's major shareholder - says that action will be taken against the workers and so far many of the workers have not actually resumed work.

The three-week dispute has been a huge embarrassment to the government of Mozambique, as the plant is the biggest foreign investment in the country since independence in 1975.

More than 400 workers at the Mozal aluminium plant have been striking over pay since 3 October. Those that turned up to work late on Tuesday afternoon went home, once they realised that they could still face disciplinary action.

"The action was illegal and in fact the action relates to an arbitration award issued earlier this year...therefore the union and the company were bound to abide by that arbitration award. That is what makes this strike illegal," Billiton's Michael Campbell told the BBC's World Business Report.

Dollar demands

The workers want their salaries to be paid in dollars - like expatriate workers - so they can be protected against currency depreciation.

Wage negotiations earlier this year secured workers a 35% pay increase, and increased minimum monthly wages at the company to 8m meticais ($364).

Billiton argues that unless expatriate workers were paid in dollars, it would be difficult to attract them to work in Mozambique, given the weak currency.

"It is inconceivable that local employees and expatriate employees would benefit from the same terms and conditions," Mr Campbell said.

Billiton, the London-based metals company, owns 47% of Mozal.

The Mitsubishi Corporation of Japan holds 25%, South Africa's Industrial Development Corporation 24% and the Mozambican government the remaining 4%.