January 7, 2011 - Government of Newfoundland and Labrador

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Protecting the Labour Rights of Newfoundlanders and Labradorians in a Globalized World to at least some of the undertakings that were made to the government. And in most cases, the undertakings, which are confidential and not accessible to the public even under freedom of information requests, were contravened with Ottawa's blessing.” 9 The Globe investigation noted that foreign mining firms including Vale SA of Brazil, Anglo-Swiss miner Xstrata PLC and London-based Rio Tinto PLC have all been able to eliminate Canadian jobs and, in some cases, reduce spending in Canada, less than three years after purchasing the assets of Inco, Falconbridge and Alcan respectively. This was done despite undertakings made to Investment Canada to maintain staffing and spending. The Brazil-based mining giant Vale spent $19 billion to purchase Canadian mining company Inco. At the time, it was one of the largest foreign takeovers in Canadian history. Voisey’s Bay Nickel was discovered by two prospectors in 1993, freelancing for Diamond Field Resources. It was considered one of richest nickel discoveries in Canadian history. Soon two of Canada’s largest mining corporations entered a bidding war for the Voisey’s Bay resource. In the end, Inco won the war against Falconbridge and spent a whopping $4.3 billion for the discovery. Development of the mine was held up as the province of Newfoundland and Labrador insisted that the ore from the mine be processed in this province rather than shipped out, providing long-term jobs for Newfoundlanders and Labradorians. These are exactly the kind of demands governments need to be making of multinationals as part of the condition of reaping the benefits of the province’s rich resources. Indeed, the current government has played extremely tough with multinationals wishing to cash in on the province’s rich natural resources. And that stance has resulted in not just increased royalties for the province, but equity shares in several oil and gas developments. 9 “Broken Promises Mark Foreign Mining Deals”, The Globe and Mail, October 5 th , 2010, http://www.globeadvisor.com/servlet/ArticleNews/story/gam/20101005/RPOTASHINVESTMENTCANADA HOFFMAN1005ATL# Newfoundland and Labrador Federation of Labour Page 23
Protecting the Labour Rights of Newfoundlanders and Labradorians in a Globalized World Arguably, the province’s “no more giveaways” philosophy has turned conventional wisdom in Canada on its ear. After all, if a little province like Newfoundland and Labrador can go to the bargaining table with big oil and big mining and win considerable gains, why couldn’t a province Alberta or Ontario? The NL Federation of Labour has supported the province’s tough stand in dealing with multinationals and in protecting our natural resources. But we have also been very clear that no more giveaways must also apply to fundamental and core labour rights. In May 2010, Vale Inco became Vale viewed as a bold step for the company onto the global stage. Since then the company’s growth has continued unabated as it expands throughout the world. According to Prof. John Peters, Vale financed numerous mergers and acquisitions over the course of the past decade that allowed it to quickly outpace far larger mining companies. In the early 2000s, mining’s global capital market was about$180 billion and the largest firms BHP Billiton and Rio Tinto had market capitalization rates under $30 billion. Inco and Falconbridge – the two largest Canadians companies – were one-fifth the size of the largest firms. By 2010, according to research by Prof. Peters, mining had been completely transformed. Inco and Falconbridge, along with hundreds of other small and medium sized mining operations had completely disappeared – swallowed up by the big mining giants. Market capitalization rates of the mining giants expanded more than four-fold in a decade to capture more than 55% of the global market capitalization of $1.3 trillion and close to 50% of all revenues. Over this time BHP and Xstrata grew to more than ten times their original size. Vale expanded more than twenty-fold and climbed the ladder of globally diversified mining giants. Prof. Peters, quoting a PricewaterhouseCoopers report, notes that the top 40 mining companies in the world over the 8-year period 2001-2009 saw annual net profits grow by twelve-fold to $50 billion. It was in this context of rapid global growth and overexpanding profits that Vale entered Canada. Newfoundland and Labrador Federation of Labour Page 24
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January 7, 2011 - Government of Newfoundland and Labrador

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