OREANDA-NEWS. August 4, 2010. PGOK workers are on strike for double wages and better benefits

The “Italian strike” was initiated on Poltavskyi OMEP on August 1, 2010. The open pit miners began their day strictly adhering to safety norms, which decreased output by 50%. The enrichment plant workers are ready to join in the strike. The strike is a result of the recent cutbacks on social benefits connected with hazardous work conditions. The protest may continue until the management returns the previous benefits, establishes realistic production norms, and increases wages twofold.

Millennium Capital: the news is negative for PGOK and its parent FXPO. Operations personnel costs make up 10-11% of PGOK cost of sales, so if management recedes to workers’ demands, the COGS for 2010 may increase by 5% or USD  20mn in money terms.