The management will meet trade unions on September 14th to discuss as one of KGHM trade unions has demanded on last Wednesday PLN90m additional bonus payment for good production results in 2H06. KGHM management has initially refused, stating that the recently signed agreement with unions, relating to PLN 90m production bonus payment for 1H06, prohibits unions from raising more wage demands in 2006.
Our view:
We do not expect any bigger negative market impact of the news on more wage demands, which were already flagged on last Wednesday. Workforce tensions have become a commonplace throughout copper industry and increases in production cost seem unavoidable. As long as copper prices remain high, as we believe they would, we reiterate our positive view for KGHM.
Our view: