Mine jobs lost worldwide as recession hits metals

By Steve James

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.