Mining Firm Reaches Labor Deal The Agreement Between Silver Valley Resources And Steelworkers Could Hasten Resumption Of Operations

Silver Valley Resources Corp. has signed a labor agreement with United Steelworkers of America for the two silver mines it controls.

Despite the fact that no workers have pulled silver from either mine in years, the contract establishes low labor costs that could make bringing the mines back on line more workable.

The two sides signed a collective bargaining agreement for the Coeur and Galena mines in the Silver Valley. The deal marks the next step to reopening the properties idled since the early ‘90s.

However, reopening the mines remains entirely up to the sagging silver market, said Tony Ebersole, spokesman for Coeur d’Alene Mines, which owns half the interest in Silver Valley Resources with its New York-based partner Asarco Inc.

The new corporation - formed in October - oversees the two mines and the adjacent Caladay silver property. Asarco had done the majority of the negotiation for labor agreements at the mines in the past, running some of the lowest-cost silver mines in the world until the silver market began a nose-dive in 1990.

The new labor agreement creates a skill-based pay system that pays miners based on their skill levels. While giving the company flexibility in its labor costs, the contract provides opportunities for workers to learn new skills and make more money, according to the union.

“The USWA is confident that the newly agreed upon working relationship will benefit all those associated with this new company as it begins its corporate life,” said Dave Foster, district director for District 33 of the union, in a prepared statement.

Along with the eventual reopening of the mines, Silver Valley Resources continues to consider a $25 million exploration project focused mostly on the Galena mine, Ebersole said. Half the money would come from both Coeur d’Alene Mines and from Asarco, reflecting how much control each has in the new corporation.

Silver Valley Resources would most likely start the exploration in conjunction with reopening one or both mines, the company said.

Both Coeur d’Alene Mines and Asarco have said that silver would need to reach $6 or $7 an ounce for the mines to reopen.

Rather than focus on price, Ebersole said Silver Valley Resources will focus on the strength of the silver market in deciding when to reopen the mines.

“Asarco has said in the past that $7 silver would be needed, but what we’re saying is that no one price will trigger our decision,” he said.

Silver analysts predict silver will trade between $5.50 and $5.80 an ounce for the year. It closed Thursday at $4.88 an ounce.