Mine jobs lost worldwide as recession hits metals

NEW YORK (Reuters) - All over North and South America, miners are losing their jobs as the recession hits demand for metals that enjoyed a boom in recent years.

In Chile, where copper mining is a major contributor to the economy, unions estimated 14,000 jobs have been lost. Peru reported more than 5,000 layoffs and Mexico put the number of out-of-work mine workers at 2,000.

In the United States, Freeport McMoRan Copper & Gold Inc (FCX.N), said it is laying-off 3,000 workers, many of them at its Morenci mine in Arizona, where it is reducing operations to cut costs as copper prices have plummeted.

Canadian government data show payrolls in the coal, metal and nonmetallic mineral sector fell 11.5 percent in the second half of 2008, as falling metals prices prompted mine closures and smaller exploration budgets.

"People are very, very nervous," said John Rebrovich, a United Steel Workers union official in the Iron Range region of Minnesota, who represents 50,000 mine workers.

"Right now, we're hanging on, but when the steel mills tighten up (on production), they (mines) will cut back."

Rebrovich said the U.S. Steel (X.N)-owned Kee-tac iron ore mine was recently idled, with half the 325 workers laid off and the rest doing maintenance work at a nearby mine.

The Hibbing Taconite mine -- in singer Bob Dylan's hometown -- has cut production, with 100 workers either taking voluntary lay-offs or early retirement, he said.

Another 477 workers were let go at Cliffs Natural Resources Inc's (CLF.N) Empire and Tilden mines and Cliff's United Taconite mine is operating a 32-hour work week.

Carole Raulston, of the National Mining Association, said layoffs were rising in metals mining and also for metallurgical, or coking coal, used in steel-making.

"We think it (labor) will continue to be affected by the general state of the economy," she said.

Phil Smith, spokesman for the United Mine Workers of America, said there were about 1,000 layoffs this month at mines producing met coal. But he does not forecast a wave.

"Not unless the steel market completely collapses," he added.

As for thermal coal, which is used for electricity generation, Smith sees few layoffs.

"Steam coal? They can't hire enough people," he said.

MINERAL WEALTH

The economic downturn is hitting particularly hard in Latin America, where economies depend on mineral wealth. Chile's Sonami mining group estimates at least 14,000 jobs have been lost.

"Mining is concentrated mostly in the country's north, where for many cities it's the only source of jobs, so the impact of the crisis will be very significant for many people," said Alfredo Ovalle, president of the Sonami.

"We think these will not be the final (job cut) figures," Ovalle told a news conference in Santiago.

BHP Billiton Ltd (BHP.AX)(BLT.L), the world's largest diversified miner, has already cut 2,000 people from its Chile operations alone. That came on the heels of other job cuts announced by Chile's Antofagasta Minerals (ANTO.L).

Chile's government has committed $1 billion in capital injection for Codelco, the state-owned copper producer that employs more than 40,000 workers. Codelco is not expected to turn to lay-offs like the private sector.

Peru's National Federation of Mine and Steel Workers says more than 5,500 workers have lost jobs since December, while the Labor Ministry says at least 4,000.

"The mining sector ... has lost most jobs," Labor Minister Jorge Villasante said. "We've asked businesses to reduce other costs instead of eliminating jobs."

Mexico's Mining Chamber says about 2,000 jobs have been lost. Some smaller projects have been cut, but major miners, Grupo Mexico (GMEXICOB.MX), Penoles and its precious metals miner Fresnillo, and GoldCorp Inc (G.TO) have not announced cutbacks yet.

"We are all worried about the economic crisis ... but we have to look at what prices were like four years ago and what they are today," said mine union official Carlos Pavon.

"Miners (companies) are still profiting. It is true that they have lost money, but the price of copper, for example, is not yet below the cost of production. We have room to negotiate."

(Editing by Andre Grenon)