CHICAGO (Commodity Online) The frequency of strikes in metals and mining companies in Latin America are not likely to lead to rating downgrades in the region in 2010, according to Fitch Ratings.. The companies that have tapped the debt capital markets, namely in Brazil, Chile, Mexico and Peru, tend to have diversified operations, enabling them to effectively weather strike action.
Those that are not diversified, such as the copper miners in Chile, in general are protected by laws that result in short work stoppages. In addition, due to the strategic importance of the metals and mining sector to the Chilean economy, strikes at these operations are encouraged to be resolved quickly.
Metals and mining labor unions in the region are relatively weaker than their peers in many developed markets due to their fragmentation, particularly in Brazil. In addition, high unemployment levels in the region, as well as the relatively high salaries of the mining employees versus other employees with similar skills also weaken public support for prolonged strikes.
The report considers the labor frameworks in the region and views Brazil's as being the most fragmented in the metals and mining sector. This lowers labor strike risk in Brazil considerably as the fragmentation makes mobilizing on a large scale difficult.