Hecla, union reach tentative deal to end Lucky Friday mine strike

Hecla Mining Co. and a union representing more than 200 workers have reached a tentative deal that could end a 2 1/2-year strike at the Lucky Friday Mine near Mullan, Idaho.

The Coeur d’Alene-based company and United Steelworkers Local 5114 have been in a stalemate in contract negotiations since March 2017, when union members went on strike because of proposed changes to work assignments, health care benefits, vacation scheduling and bonus pay tied to silver prices.

A point of contention among union members was the prerogative of lead miners to pick their own work crew – an established tradition at the 77-year-old silver mine.

The tentative agreement between Hecla and the union requires ratification by a majority of union members, said Luke Russell, Hecla’s vice president of external affairs.

With the help of a federal mediator, Russell said, Hecla reached an agreement with the union on medical premium costs, an increase in base wages and job assignments in training that would allow workers to receive raises as they increase skill sets. The agreement would also allow lead miners to choose their own crews.

“We think the tentative agreement could put the Lucky Friday Mine on the path to success, but it’s up to the union to schedule a vote on it,” Russell said.

When reached by phone, USW 5114 declined to comment.

“As is our standard practice in these situations, we won’t have any further comment until members have the chance to review the agreement and hold meetings to discuss it,” R.J. Hufnagel, spokesman for United Steelworkers, wrote in an email.

USW 5114 indicated on its Facebook page that “final drafts between the company and the union have to be passed between the two sides and corrected as needed.”

“There’s a lot of work to do, so all we can say is that it will be done when everything comes together,” USW 5114 wrote on Facebook. “We would like to have meetings held and votes collected and counted by the end of the month. That may happen or not, depends on how quickly all the information is gathered.”

The union indicated on a Facebook post it also needs to gather insurance information, print ballots and figure out return-to-work terms.

Production at Lucky Friday was initially suspended when miners struck beginning in March 2017. Limited production by salaried employees began in July 2017.

The strike cost Hecla $14.6 million in 2018, according to Hecla’s 2018 year-end earnings report.

Silver production at the mine dropped to 169,041 ounces in 2018, a decrease from the 838,658 ounces produced in 2017, according to the report.

When a previous six-year contract between Hecla and USW 5114 expired in 2016, the two sides met several times with a federal mediator, but couldn’t arrive at an agreement. The company indicated at the time it was attempting to cut costs at the Lucky Friday Mine, but workers said the company was trying to change a way of life existing at the mine for more than seven decades.

USW 5114 rejected a proposal to end the strike last March by voting against arbitration, stating a panel of arbitrators would have allowed management “unprecedented, unchecked control over who works and the schedule they work, along with who advances through Hecla’s job progression system and at what pace,” according to a union press release.

On Thursday, Hecla reported a third quarter loss amid its efforts to eliminate debt.

The company posted a net loss of $19.7 million for the quarter, or 4 cents per share, compared to a net loss of $23.3 million, or 5 cents per share, in the third quarter of 2018.

At the Lucky Friday Mine, 115,682 ounces of silver were produced by salaried workers in the third quarter of 2019, compared to 31,639 ounces in the third quarter of 2018.

The company noted in third quarter results that the Lucky Friday Mine earned the 2018 Sentinels of Safety award by the National Mining Association – the highest safety honor for a mine in the U.S. – for the first time in its history of operation.

Lucky Friday was recently showcased by the Idaho Department of Environmental Quality as an example of environmental leadership for its efforts in creating waste treatment facilities that reduce the concentration of lead and zinc in the water and a water recycling program that reduces freshwater use by 95% in the concentrator plant, according to the company’s third quarter earnings report.

If an agreement is finalized between Hecla and the union, a ramp-up to full production at Lucky Friday is expected to take about a year, according to the company.

“It could set the mine up for long-term success,” Russell said. “It will take some time – up to a year to ramp back up the full production once the agreement is ratified – but that will be a benefit for workers, shareholders and the Silver Valley community.”