SAO PAULO, Brazil: Last year was definitely
the Chilean copper industry would just as soon forget
In the first half of 2009, local producers struggled to deal
with prices that had plunged on the back of the worldwide
economic crisis. Fortunately, they managed to cut costs and
increase production during those first few months.
But just when everything seemed to be heading in a more
positive direction, workers balked in several contract
negotiations, resulting in strikes and a surplus of tension in
both Chile and the international copper market.
The year ended in a dramatic and emblematic way when workers
at Chuquicamata-the largest mine operated by the world's
largest producer, state-owned Corporación Nacional del
Cobre de Chile (Codelco)-decided to lay down their tools in
support of demands for higher wages.
Earlier, workers at BHP Billiton's Spence copper mine and
Xstrata Copper's Altonorte copper and molybdenum smelter also
went on strike for better wages and benefits. The worst
situation was at Spence, where workers downed tools Oct. 13 and
didn't resume activities until the end of November, after weeks
of mounting tension, protests and blockades of access roads to
But BHP managed to avert potential strikes at the Cerro
Colorado Mine and, most important, at the world's largest
copper mine, Minera Escondida, where workers got a 5-percent
wage increase and 14.5 million pesos ($29,500) in bonuses and
benefits, an amount considered extremely high in Chile.
When the deal was sealed in October, many argued it would
set dangerous precedents for negotiations scheduled to follow
elsewhere in the country. Juan Carlos Guajardo, general manager
of Chilean copper study group Centro de Estudios del Cobre y la
Minería, was quoted as saying in local news reports
that the high bonus and benefits at Escondida was going to make
things more difficult for other companies, especially Codelco.
His prediction proved correct when workers at Codelco Andina
rejected an early company offer of bonuses and benefits of 9.3
million pesos ($18,900) plus a 3-percent wage increase.
Codelco settled with Andina workers at the end of October,
but a few days later workers at Chuquicamata staged a one-day
strike and at the end of December voted to go on strike
indefinitely, rejecting a 3.8-percent wage rise and 11.5
million pesos ($23,400) in bonuses. Two days later, the workers
accepted a revised offer calling for a 4-percent wage increase
and 12.14 million pesos ($24,700) in bonuses and an optional
loan of 3 million pesos ($6,100).
Compared with the tension-filled final months of 2009, this
year is expected to be a pleasant change-although uncertainties
The next major collective bargaining agreements set to
expire in Chile's copper sector are those in effect at
Codelco's Radomiro Tomic copper mine, which produced some
300,000 tonnes in 2008, and at Collahuasi, the country's
third-largest copper mine. Owned by Xstrata and Anglo American
Plc, Collahuasi produced 464,000 tonnes in 2008. Both contracts
are scheduled to run through Nov. 30.
"In the last negotiations, in 2007, wages rose 3.5 percent,
but it is still too early to estimate a percentage for this
year," Ricardo Flores Iriarte, secretary of the Radomiro Tomic
union, told AMM. "But, yes, the Chuquicamata deal will
be a reference for us, although the operations are
Manuel Octavio Muñoz Barrientos, president of the
Collahuasi union, said that workers received a 4-percent wage
increase in 2007 after tense negotiations and a strike that
lasted a few days.
"It is still early to make forecasts, but we can say that
the company recorded very strong results in 2007 and 2008 and
we will want part of that," the union leader said.
Pedro Marín, president of the Chilean mining workers'
federation, rejected charges that workers were stubborn last
year, and said that negotiations in 2010 would possibly be
better. "The miners reported very high revenues in the past few
years, and workers demanded only 2 to 3 percent of their net
profits; is that too much?" he asked.
That question won't be fully answered until the end of this
year, by which Codelco, Xstrata and Anglo American hope to have
reached agreements with their workers without causing - or
being on the receiving end - of too much pain and with all
parties at least minimally satisfied.