As copper prices tumbled in June and July, contract negotiations at two of Chile’s biggest mines cratered, with strikes calendared for mid-August. Work halted at both Lumina Copper’s Caserones mine and Codelco’s Chuquicamata, formerly the world’s biggest pure-play copper mine, as miners walked off in late July. At the same time, the government was invoked to quell strike threats at Escondida, currently the world’s biggest copper mine.
Escondida’s union said majority owner BHP must improve its contract offer in an impending final phase of negotiations to avoid a strike. The union asked for a signing bonus almost double what the company offered, as well as a salary increase of 5%, according to wire reports. The strike is set for August 14.
A 44-day strike at Escondida in the second quarter of 2017 was blamed for an 8.6% decrease in annual mine output, a 21% year-over-year decline in refined copper output by minority owner Rio Tinto, global copper price increases, and a year-over-year decline in total national annual copper production.
In early August, striking Chuquicamata miners picketed and blocked access to the mine, with wire reports making predictions that the disruption would span only a few days. Chuquicamata unions No. 1, 2, and 3, and Antofagasta Union No. 1 reported the protest centered on the layoff of two workers.
Codelco and the six unions at the mine agreed to 27-month contracts in December 2016. The mine, now the second biggest in the country, produced roughly 331,000 metric tons (mt) of copper in 2017.
At Caserones, a strike is set for August 14 after the most recent round of labor negotiations failed, according to the mine’s 300-member union, wire reports stated. The union rejected Lumina’s declared final offering tabled in late July.
Caserones produced roughly 123,000 mt in 2017.
The strikes come at an opportune time for mining companies, as downward trending copper prices bottomed out in early July, and as energy costs rose and the dollar recovered from historic lows. At their lowest point this year, on August 2, copper prices had fallen more than 16% from their peak on June 8. Nationwide, exports fell in July to the lowest point this year, according to wire reports. The value of the copper exported for the month, however, was roughly 10% higher than for the same month last year due to a sharp increase in production that offset the decline in prices.
