Copper Mine Strike Lengthens as Unions Reject Offer

(Bloomberg) -- The world’s top copper producer is facing the longest strike in years at one of its main mines in Chile as unions called on about 3,200 workers to reject the latest offer from Codelco.

The stoppage at Chuquicamata entered a seventh day on Thursday as workers prepare to vote on Saturday whether to accept the Santiago-based company’s latest offer for a collective contract. At a meeting on Wednesday evening, three labor unions said the offer fell short of their demands for health-care coverage, while redundancy packages for workers leaving the mine as it moves from an open pit to an underground operation were insufficient.

“Codelco’s offer is irresponsible,” the unions said in a joint statement following the meeting. “It proposes benefits that are inferior to those included in the offer that led us to this strike."

Copper futures in London were at the highest in more than three weeks on Thursday, following the unions’ announcement and after the Federal Reserve signaled readiness to cut borrowing costs to fight economic headwinds. The disruption is helping boost the outlook for prices at a time when supply of mined ore is already tight and inventories in China are declining, Colin Hamilton, an analyst at BMO Capital Markets, said earlier this week.

Chuquicamata workers asked their union leaders to seek dialog with Codelco during the meeting on Wednesday, according to the statement, suggesting talks between the two parties remain stalled.

Payment Offered

Codelco’s offer is serious, responsible and realistic, a company official said in a text message. Management has worked to reach agreements that benefit both workers and the company, and that improves Chuquicamata’s competitiveness, the official said.

Earlier this week, Codelco offered workers a one-time payment of 14.1 million Chilean pesos ($20,367) and more generous retirement options for the 1,700 workers who will leave the mine as it transitions to underground operations this year and next.

Codelco’s third-largest mine was operating at 50% to 60% capacity during the first days of the strike, the company said earlier this week. The mine produced 321,000 tons of copper in 2018 and output was expected to remain flat this year. The effects of the stoppage could be felt more broadly, as the Chuquicamata smelter and refinery process ore from all of Codelco’s northern division, which accounted for half of its 1.68 million tons of output last year.

To contact the reporter on this story: Laura Millan Lombrana in Santiago at lmillan4@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter

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