500 employees of Rema, the private company servicing KGHM smelter in Glogow, demanded the same wage benefits as KGHM workers have. Average pay at Rema is half that at KGHM, and close to average pay in industrial sector. To support their demands, Rema workers have announced short strike actions several times already, disorganizing the work at KGHM smelter. According to today’s Puls Biznesu daily, KGHM spokesman suggested that their demands could be met.
Our view: If KGHM management agrees to extend the social benefits enjoyed by KGHM workers to numerous other cooperating companies, it would lead to significant increase in, already high, cost of production. It would mean a U-turn in KGHM present policy to limit the number of privileged jobs in unionized divisions. We view the news as negative. Nonetheless, we reiterate our Buy rating for the stock, based on the outlook for lasting high copper prices environment.