Argentina rules that Vale cannot lay off 6 workers.
"There can be no layoffs," Argentine Labor Minister Carlos Tomada told reporters, adding that the mandatory conciliation applies to both Vale employees and third-party contractors; the multi-billion dollar Rio Colorado potassium project was suspended by the company earlier this week.
BUENOS AIRES, March 15 (Reuters) The Argentine government announced on Friday that it has ordered Brazilian mining company Vale to retain the 6,5 employees who were working on the multi-billion dollar Rio Colorado potash project, which the company suspended earlier in the week.
"There can be no layoffs," Argentine Labor Minister Carlos Tomada told reporters, adding that the mandatory conciliation applies to both workers hired by Vale and by third parties.
"If companies fail to comply, significant fines will be imposed," Tomada added.
The measure prevents layoffs until April 11th, and the mandatory conciliation order may be extended later.
When contacted, Vale said it had no comment to make immediately.
On Wednesday, the Argentine government threatened to revoke Vale's concession for the Rio Colorado potassium project, following the Brazilian mining company's announcement this week that it would halt the project.
The Rio Colorado project is budgeted at approximately 6 billion dollars, of which Vale has already invested around 2,2 billion dollars.
The world's second-largest mining company said it has completed 45 percent of the Rio Colorado project, which includes, in addition to the mine, 800 kilometers of railway and a terminal at the port of Bahía Blanca, south of Buenos Aires.
In December, shortly before placing employees in Argentina on paid leave and suspending work, Vale said it was seeking a partner to buy part of the project and help cover the costs, at a time when the mining company is trying to focus investments on its core business, iron ore.
(Reporting by Guido Nejamkis; with additional reporting by Jeb Blount)