Management representatives from Asarco rejected a Union proposal to save the Company over $30 million over the next three years during negotiations this week, union representatives said today.

"The Unions identified administrative changes that Asarco could make in its pension and health care plans that would save over $30 million in cash over the next three years," said Terry Bonds, USWA District 12 Director and the union's chief negotiator with Asarco. "These savings should be the key to reaching a mutually acceptable settlement between the parties."

"The Union proposal would preserve benefits for our members, save Asarco cash and allow it to invest in its operations to increase production to take advantage of higher copper prices," Bonds said.

"We are disappointed that Asarco has rejected the bulk of our proposal, and continues to insist on wage and benefit reductions that will save less money than the proposal made by the Unions," Bonds said. "The Company's demands are unnecessary and mean-spirited."

Despite the rise in copper prices, Asarco has demanded its Unions agree to cuts in wages, health care, overtime and vacation payments, reduced pension benefits, and dramatic increases in monthly employee health care premiums.

The Unions have requested that Asarco make a formal response to the Union health care proposal. "Hopefully, the Company will review our proposal, realize what we have offered and come back to the table with the intent of reaching a fair labor agreement."

No additional meetings have been scheduled. The United Steelworkers recently filed charges with the National Labor Relations Board that Asarco has refused to provide information necessary for bargaining.

Contracts covering approximately 750 hourly employees expired on July 1, 2004 between Asarco and unions at the Company's facilities in: Amarillo, Texas; Hayden, Arizona; Sahuarita, Arizona (Mission Mine); Marana, Arizona (Silver Bell Mine); and El Paso, Texas.

Members of the United Steelworkers, International Brotherhood of Electrical Workers, Operating Engineers and Teamsters are working without a new labor agreement, under the terms and conditions of the expired agreements.