Vale S.A. : Suspension of a potassium mine project in Argentina

This report is part of our former “Harmful Cases” documentation, where we continuously and concisely recorded human rights violations, violations of international law or environmental destruction caused by companies.

Labor Rights Violation in Argentina

The Brasilian group Vale S.A. heads a multi-billion potassium mine project in Rio Colorado, Argentina, which is planed to start production in 2014. It was notably supported by the Economic Federation of Mendoza (FEM), which is led by the Mendoza Chamber of Mining Entrepreneurs (CARMEN). According to them, such a project will have a positive impact for the region owing to a three-points agreement concluded between Vale and the local authorities of the province of Mendoza. Thus, the company had to employ at least 75% of local workforce and purchase local goods and services.

However, these conditions were not totally respected and the project has been suspended by the authorities of the province of Mendoza on 17th June. They reproach the company with a lack of information about the project and because Vale did not hire enough local workforce or did not buy enough supply in the province.

But in light of the importance of the project, which will make Argentina one of the largest potassium exporters in the world, both the provincial government and Vale stress collaboration to find agreement. Vale planned for instance to reach a level of 82% of local workforce by the end of the year 2011, that is why the project is likely to restart soon.

Please find more information via the following links:

The Business of Mining