SANTIAGO (Reuters) - Production from world No. 1 copper producer Codelco ground to a halt on Tuesday as workers staged a 24-hour strike throughout Chile to demand better job security and safety standards, but private mines in the country were barely affected.
State-owned Codelco’s CODEL.UL union bosses timed Tuesday’s strike to make a splash during the international copper industry’s CESCO/CRU conference in Santiago, the world’s biggest gathering dedicated to the red metal.
The work stoppage was estimated to cost Codelco only 5,000 metric tons of output. But it comes after other mine and port strikes, raising the specter of a steady drip-drip of labor actions as unions seek to make their demands heard ahead of Chile’s November presidential election.
The stoppage at Codelco’s units, which produce roughly 11 percent of the world’s copper, barely affected a market mostly jittery about demand from top metals consumer China. Copper prices rose more than 2 percent on Tuesday after Chinese inflation data suggested Beijing would sustain an accommodative monetary policy.
The market was also calmed by the fact that operations were broadly normal at Chile’s private mines, which produce around two thirds of output in the world’s leading copper producer.
Workers at private mines, including BHP Billiton (BHP.AX), Anglo American (AAL.L) and Antofagasta Minerals (ANTO.L), only adhered partly to the national strike, even though the union representing them initially said it would join the labor action. Workers at several mines delayed shifts in solidarity with Codelco, but the impact was limited.
Codelco said it will lose up to $35 million in operational revenues, adding it had adopted contingency plans to protect equipment and installations. Normal operations are expected to resume on Wednesday.
The company will try to reach an agreement with workers to recoup lost production, said Chief Executive Thomas Keller, who has had a rocky relationship with the company’s unions since he took the reins of Codelco last year. The miner is expected to produce roughly 1.7 million metric tons of copper this year.
Codelco’s highly ambitious investment plan to lift production to around 2.1 million metric tons by the start of the next decade has led to layoffs. Workers fear more will lose their jobs or see their benefits slashed during the planned transformations of the company’s massive but tired mines.
“Managing Codelco is complicated (right now). Unions are always going to be against the company’s strategy,” Gustavo Lagos, mining professor at the Universidad Catolica, told Reuters on the sidelines of the conference. “They’re going to have to talk more,” Lagos added. “Both will have to cede.”
Though Chile boasts enviable copper reserves and is expected to produce 5.58 million metric tons of copper this year, nearly a third of world supply, miners are reeling from steep costs, tumbling ore grades and an uncertain power supply. Intermittent labor scuffles have also kept miners on guard.
“I want to express my worry about what we’ve seen in recent days, for example the port strike which caused great damage to Chile’s economy, to job creation and to our workers. And the copper strike which is happening now will also cause great damage,” Chilean President Sebastian Pinera said on Tuesday.
Unions also say they are worried about worker deaths, most recently at Codelco’s massive Radomiro Tomic mine, a growth in the use of subcontracted workers, and benefits. They hailed the Codelco-wide stoppage.
“The strike is under way and it has been a success,” said Jaime Graz, union leader at Codelco’s giant Chuquicamata mine. “This is a call to attention to the company’s management because of the poor security conditions and urgent need for pension and healthcare improvements. It’s not just about making more money.”
Protesting workers delayed the start of the 8 a.m. (1100 GMT) shift by two hours at BHP Billiton’s Escondida, the world’s largest copper mine, and blocked the access road to Anglo American’s Los Bronces mine.
“The workers adhered to the protest, but only for a limited amount of time, a couple of hours. This isn’t an action against the company, it’s a protest for the problems which at the national level haven’t been resolved,” said Marcelo Tapia, head of Escondida’s union.
Top executives at Anglo American and Antofagasta told Reuters there could be some shift delays at their local mines, but operations were functioning normally.
Operations “are functioning ... there might be some delay in the start of the shifts, but operations are functioning,” Antofagasta Chief Executive Diego Hernandez said.
Workers at the world’s No. 3 copper mine, Collahuasi in the Andean nation’s copper-rich north, decided not to strike and operations there are normal, a union leader said.
“We’re not going to participate in this strike because it’s an exploitation of workers’ demands ... Collahuasi’s operations are normal,” Collahuasi union secretary Lincon Espinoza told Reuters.
Collahuasi is owned by Anglo American Plc, Xstrata Plc XTA.L and a group of Japanese companies led by Mitsui & Co (8031.T).
Additional reporting by Alexandra Ulmer, Fabian Cambero, Moises Avila and Felipe Iturrieta; Writing by Anthony Esposito and Alexandra Ulmer; Editing by Hugh Bronstein and Phil Berlowitz