(Reuters) – A union representing striking workers at Vale SA's nickel mine in Sudbury, Canada reached a tentative agreement to settle an ongoing labor dispute that saw 2,500 workers walk off their job on June 1, hitting the Brazilian miner's production.

The five-year agreement, posted on the United Steelworkers (USW) website, includes "significant monetary improvements for existing members and preserves retiree health benefits for all future hires," and will be put to vote on Tuesday, a USW Local 6500 union representative told Reuters.

Vale will also pay $2,500 to the workers in August, "in recognition of their efforts last year during the pandemic," according to the agreement recommended by USW Local 6500.

USW Local 6500 members had voted down Vale's two previous offers. They were against the company's plans to cut health and medical benefits for retirees as well as minimal wage increases.

(Reporting by Sahil Shaw in Bengaluru; Editing by Shinjini Ganguli)