Rio Tinto Plc (NYSE:RTP) has plunged today, dropping to $48 a share, a loss of $2.84, or 5.59 percent as of 2:47 PM EDT, as it possibility of a major and prolonged strike at one of its South African mines looms over the company.
A dispute over wages at their Richards Bay Minerals mine, which is a joint venture with BHP Billiton (NYSE:BHP), could result in what is being called an "indefinite strike," signifying both sides aren't going to give in any time soon.
The strike is scheduled to begin on Friday if no progress is made.
At issue is a demand for a 10 percent raise from the union representing the miners, while the company has offered an 8 percent raise over a period of three years. The miners only want a one year deal.
Rumors Rio could be the company to come to the rescue of Potash (NYSE:POT) is also weighing down the stock, on concerns over the debt it would have to take on, or dilution in stock it would take to acquire the fertilizer giant.
There is no confirmation Rio Tinto is interested in Potash, but a growing number in the market believe they are, and coupled with the possible strike, is pushing the share price of the mining giant down.
No comments:
Post a Comment