Chile miners’ strike turns cost of copper red hot
“A strike at one of the world’s biggest copper mines in Chile is threatening to send prices of the metal, widely used in industry, to an all-time high. …
That combative stance could set the tone for a new season of collective bargaining in the industry, where bosses and unions at Radomiro Tomic and El Teniente, which belong to state-owned Codelco, and Los Pelambres, controlled by Antofagasta, are due to begin talks in the coming months.”
Source: Financial Times, November 9 2010
- The miners from the 21 mining unions organized in the mining federation produce 70% of the country’s copper, which is approx. 35% of the global copper output.
- Chilean mining unions have shifted their primary focus from improving working conditions, triggered by the world-famous rescue operation of trapped miners, back to negotiating salary & benefit packages.
- Codelco is largely state-controlled and will thus be pressured to find common ground with the unions quickly. Antofagasta plc, a public company owned for 65% by the Luksic family, will have a harder time meeting the requests for salary increases in its Los Pelambres and Michilla mines to reflect increase in commodity prices.
- Spillover effects of strikes from one company to another are unlikely, limiting the power of the mining federation. However, the risk of Codelco workers in various mines striking at the same time is enough to make copper consumers nervous.
©2010 | Wilfred Visser | thebusinessofmining.com
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