-
Chuquicamata stoppage enters 12th day as talks remain stalled
-
Workers rejected Codelco’s latest offer in a vote on Saturday
A strike at a major copper mine in the world’s largest producer of
the metal risks wiping out 10,000 metric tons from a market that’s
already expected to end the year in deficit, according to an industry
consultant.
The stoppage at the Chuquicamata mine in northern Chile could cost No. 1 global supplier Codelco
$50 million as it loses production if it lasts two weeks, said Juan
Carlos Guajardo, executive director at Santiago-based consultancy
Plusmining. The strike at the mine, which produced 321,000 tons of copper last year, entered its 12th day on Tuesday with no signs of agreement between the company and unions.
“Codelco
has been quite clear that they are offering the best possible terms for
workers,” Guajardo said in a telephone interview Monday. “And workers
say the only way to end this conflict is not higher bonuses, but equal
conditions between existing and new workers.”
Copper futures rose in New York Tuesday as supply risks mount
at Chile’s state-owned Codelco. The disruption at Chuquicamata, the
company’s third-largest mine, has helped lift the outlook for prices at a
time when supply is already tight, with the International Copper Study
Group forecasting a deficit of 189,000 tons by the end of this year.
BMO
Capital Markets was expecting 3% of global production in the copper
market would be disrupted in 2019, when it calculated its supply and
demand outlook for the year, according to analyst Colin Hamilton. The
Chuquicamata strike adds to production losses earlier in the year,
including rains in northern Chile and stoppages at several smelters in Zambia, shaving about 5% of output so far this year.
“While we have expectations of a prolonged period of trade
friction, copper will struggle to get in the good books of macro asset
allocators,” Hamilton said. “But the deficit the copper market has been
waiting on for years is now here.”
Copper
miners celebrate the rejection of the state-run Codelco Chuquicamata
mine's final offer for a contract at union headquarters in Calama, Chile
on May 29, 2019.
Photographer: Cristobal Olivares/Bloomberg
Talks stalled
No
talks are scheduled between Codelco and Chuquicamata’s Unions 1, 2 and
3, which represent around 3,200 workers at the mine, Liliana Ugarte,
president at Union No. 2, said Tuesday by telephone. Chuquicamata
workers blocked the road that leads to the company’s northern division,
and to Freeport-McMoRan Inc.’s
El Abra mine for a few hours on Tuesday for the second consecutive day
in a protest that delayed workers from reporting to the facility.
A Codelco official declined to comment on the state of
negotiations or the effects of the protests on Monday. While El Abra
operations are running normally, Freeport is monitoring the situation, a
company official said by email Monday.
On Saturday, 55% of workers
voted to reject the company’s latest offer and continue the strike.
Under Chilean labor rules, Codelco can make a new offer on June 28, or
workers can abandon the strike individually from June 29, automatically
accepting a previous offer from the company.
One central issue in
the negotiations is the retirement plans of about 1,700 workers whose
jobs will be cut once the mine transitions from open pit to underground
operations in the next 12 months. Younger workers -- who joined the
company after the last commodities downturn with lower salaries and
fewer benefits -- also want the same package of benefits as experienced
workers.
“When the older workers leave as part of the retirement
plan, it will be the young guys with precarious jobs who will replace
them,” Rolando Milla, president at Union No. 3, said by phone. “The
strike ends with equal conditions for all workers, that’s it.”
— With assistance by Danielle Bochove
No comments:
Post a Comment