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. Last Updated: 07/27/2016

SUAL Bauxite Miners Go on Strike

Workers at the country's top bauxite mines, operated by aluminum giant SUAL, went on strike over pay on Thursday, trade union and company officials confirmed.

The Northern Urals bauxite mines, or SUBR, "have stopped operating," Alexander Anisimov, deputy head of a regional independent trade union, was quoted by Reuters as saying. "It was bound to happen because workers have long accused the administration of keeping wages low while increasing production norms."

The Reuters report indicated that "around 6,000 workers" had gone on strike, but SUAL spokeswoman Olga Sleptsova, when reached by telephone Thursday evening, called this claim a "provocation." Only 480 miners refused to come to the surface demanding better pay, she said.

Troika Dialog metals analyst Vasily Nikolayev said SUBR produces 3.5 million metric tons of bauxite annually, accounting for the bulk of 4.4 million tons produced in Russia last year.

Bauxite hauled from the earth is used to make alumina, which in turn is smelted to make aluminum.

"The bauxite produced there is almost exclusively used by SUAL itself, so the strike won't have any impact on world's bauxite supplies," Nikolayev said.

Neither will it effect world aluminum production in any significant way. With 865,000 tons of aluminum produced last year, SUAL accounted for only 3.4 percent of the market, he added.

Renaissance Capital chief strategist Roland Nash said the strike will have "no major or even minor economic effect." He said he doubted the strike would continue for a significant length of time.

"The history of strikes has shown that unions and workers are very weak in Russia," Nash added. "Working conditions at SUAL are generally better than at their competitors, so workers have a weak bargaining position."

According to a statement released by SUAL on Thursday, salaries at SUBR are among the highest in the Urals region, with miners making around 12,500 rubles ($409) a month on average.

Troika Dialog's chief economist, Yevgeny Gavrilenkov, said the strike was not indicative of problems across the economy in terms of wage payments. "Wage arrears is no longer the problem it used to be in the 1990s," he noted. "It is the problem of a specific company and not of the economy as a whole."

An arbitration commission, consisting of 34 company representatives and 34 workers, will try to resolve the issue Friday, the SUAL statement said.