Union says Inco offer 'an insult'

Nickel, used to make stainless steel, is in tight supply

The United Steelworkers union has urged workers at the Sudbury operations of Canadian mining firm Inco to reject the firm's latest contract.

"Its an insult to our members" said Wayne Fraser, a representative with the United Steelworkers union.

Wages, pensions and job security were all points of dispute, said Mr Fraser, and a strike, which he had said was possible on Friday, is more likely.

Inco said there was still time to talk before the 31 May deadline.

"Anything is possible between now and then," Inco spokesperson Cory McPhee said.

The existing contract ends on 31 May but the union had set a previous deadline of midnight on 26 May to give members time to vote on any new proposals.

In the event, Inco made the latest offer early on 28 May.

Tight supplies

When the previous negotiations took place in 2003, about 3,000 workers embarked on a strike that lasted for three months, in protest at healthcare benefits.

The union represents about 3,100 workers at Inco's Sudbury operations.

The possible strike comes as supplies of nickel, which is used in the production of stainless steel, have become increasingly tight.

Inventories of nickel on the London Metal Exchange hit their lowest level since October 2005 on Friday, falling 246 tonnes to 18,432 tonnes.

The price of nickel shot up on Friday by $900, hitting $22,900 a tonne, after union members urged workers to strike.

The increase represented a 4% increase on Thursday's close.

Tight supplies come amid moves to consolidate the industry.

Inco has been in the running to acquire Canada's Falconbridge, also a nickel producer, but Swiss mining group Xstrata recently entered the race, offering a higher bid.

Meanwhile Inco is the target of a hostile takeover from Teck Cominco, the world's largest zinc producer.