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August 23, 2017

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Chile strike halts world's largest copper producer

SANTIAGO--Workers at the world's largest copper producer, Chile's Codelco, went on strike Monday for 24 hours over modernization plans they fear amount to privatization.

The company's first strike in 18 years halted work at Chuquicamata — the world's largest open-pit mine — El Teniente and Andina. The state-owned operations produce more than 10 percent of the world's copper.

The nationwide strike affected all company units, said Raimundo Espinoza, president of the Federation of Copper Workers (FTC), which represents some 15,000 full-time Codelco workers.

Espinoza said the union had "concrete information" of plans for a "covert privatization" of the company, calling Monday's action a "warning strike."

The workers oppose modernization plans being implemented by company officials appointed by President Sebastian Pinera, the first conservative to take office in Chile in 20 years.

Codelco has 20,000 full-time employees, 75 percent of whom are unionized. The company also has some 20,000 subcontracted workers, all of whom have joined the strike.

In the capital Santiago, hundreds of students protested late Monday in solidarity with the miners, leading to clashes with riot police in which two police were wounded and 12 people arrested.

Government reform plans that are already being implemented include shedding some 2,600 full-time Codelco jobs.

Pay for Codelco workers is around US$4,000 a month, four times the average Chilean salary of around US$1,000. Workers say the high pay is necessary because mining is dangerous and results in a high level of work-related illnesses.

But analysts say that Codelco workers have accumulated benefits over the years that are now a heavy burden for the company.

Codelco managers say the modernization plans are necessary to compete with more nimble private operations, but the workers believe they are designed to saddle the company with debt so that private investors have to bail them out.

Mining Minister Laurence Goldborne has denied plans to privatize the lucrative company, saying: "We are not moving in that direction."

The strike halted production of about 4,900 tons of copper and will generate losses of more than US$40 million, according to Codelco figures.

Chile is the world's top copper producer, churning out some 5.6 million tons a year, of which 1.7 million is produced by Codelco.

The remainder comes from mines operated by privately owned concerns, including the Anglo-Australian company BHP Billiton, Antofagasta Minerals PLC, Anglo-American PLC, and Freeport-McMoRan Copper Gold Inc.

Codelco head Diego Hernandez — who previously headed BHP Billiton's operations in Chile — denied plans to privatize the company, but acknowledged that workers were unhappy.

The strike "is in part unease over the changes that the company has implemented and must continue carrying out," Hernandez said on Sunday.

Aside from the layoffs, changes include technical upgrades to access the harder-to-reach copper, as many of the easily accessible veins have already been exhausted.

Company officials say the upgrades will result in a production increase of 2.1 million tons by 2020.

The strike was being held on the 40th anniversary of creation of Codelco, founded after foreign mining companies were nationalized in 1971 by the leftist government of president Salvador Allende.

Pinera, who took office last year, is the first conservative Chilean president since the 1973-1990 military regime, led by general Augusto Pinochet, that toppled Allende.

In 2010, Codelco generated more than US$5.7 billion for the Chilean state.

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