BUENOS AIRES, March 15 (Reuters) - Argentina ordered Brazil’s Vale SA on Friday to keep on at least 6,500 workers at the $6 billion Rio Colorado fertilizer project, which the company halted this week after it failed to get tax concessions.
“Not a single lay-off will be allowed,” Argentine Labor Minister Carlos Tomada told a news conference, saying the declaration of compulsory conciliation applied to workers employed directly by Vale as well as contractors.
“In the case that the companies do not respect it, significant fines will apply,” Tomada added.
The measure prevents lay-offs until April 11 and compulsory conciliation orders can be extended subsequently.
Officials at Vale headquarters in Rio de Janeiro were not immediately available for comment.
Vale, the world’s second-biggest mining company, said on Monday it was halting operations at the potash mining project after failing to get the tax breaks it wanted from the government.
Vale asked for the tax breaks to help ease soaring costs it attributes to Argentina’s rampant inflation and controlled exchange rate.
A source with direct knowledge of Vale’s plans told Reuters on Wednesday that the company, the top global producer of iron ore, plans to sell the fertilizer project in Argentina to recoup the $2.2 billion it has invested so far.
The suspension of the project is a blow for left-leaning President Cristina Fernandez, and officials warned Vale that scrapping the project for good would violate the terms of the mining concession.
News of the project’s suspension sent shockwaves through the Andean province of Mendoza due to fears over the impact of thousands of job losses.
Local Governor Francisco Perez told Friday’s news conference the project would go ahead “with or without Vale.”