Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Pandemic saps union clout as talks loom with Chile copper miners

Stock MarketsMay 29, 2020 07:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: The Codelco El Teniente copper mine, the world's largest underground copper mine is shown near Machali, Chile 2/2

By Fabian Cambero

SANTIAGO (Reuters) - Chile's powerful copper unions are headed into contract talks with a hand weakened by the coronavirus pandemic, giving an edge to miners like Codelco, Glencore (OTC:GLNCY) and Antofagasta in negotiations that could influence wages and benefits for years.

Chile's generally well-paid copper mine workers argue they should be adequately compensated for working in a riskier environment to keep pits open during the pandemic.

Their position has not found much support, even in a country that was already racked by protests over inequality before the coronavirus hit. Union leaders said it would be harder to achieve wage hikes, bonuses and benefit boosts now that the pandemic has swept through the global copper market and hit profits for miners in Chile, the world's top producer.

Even the timetables for talks, which differ for each miner and its unions, could slip as companies push to delay the renegotiation of expired contracts until the country emerges from coronavirus lockdown.

"Obviously we are not engaged in collective bargaining at the moment, we are engaged with coronavirus," Felipe Román, head of the union at Collahuasi, a joint venture of Anglo American (L:AAL) and Glencore (L:GLEN), told Reuters.

"And when it comes to the point of negotiating contracts, that will be pretty tough."

Chile's miners, plagued by falling ore grades, were already looking to shave costs and boost efficiency during a prolonged period of floundering prices for the red metal. The coronavirus has hardened their resolve.

The copper price plunged to a four-year low in March as demand fell from China, the world's largest consumer of the red metal and the country first hit by the pandemic. The sinking returns have weighed heavily on balance sheets.

Prices have regained some ground as China begins to reopen. However, unions in Chile acknowledge they may not be able to get the usual contract sweeteners.

"That is the subject of the discussion. We always go with a position adapted to the situation that is being experienced," said Guillermo Esquivel, head of the union at Antofagasta's (L:ANTO) Zaldívar mine.

"Expectations have to be measured," he added saying that so far there had been no proposal to advance the talks.

In some recent negotiations, Codelco and others have been trying to reduce expensive perks such as pricey health care plans that often extend to retirement.

Several copper miners have postponed projects to improve ore grades and shore up future production and profits, and analysts said these companies may be less willing to consider performance bonuses or maintain health coverage or other hard-won benefits for workers.

Antofagasta, Collahuasi and Codelco declined to comment on the upcoming contract talks.

BIG BONUSES

The sector has largely remained operational, with measures including distancing and fewer, but longer, shift periods to reduce travel to-and-from the mines.

"Low copper prices and reduced shifts have further complicated the scenario in a country already in crisis," said Alejandra Wood, executive director at Chilean think tank the Center for Copper and Mining Studies (CESCO).

"Perhaps, for that reason, a space has opened up in which we won't see these several million (peso) bonuses anymore."

Wider fears over increased levels of automation by miners keen to boost productivity has also put unions on the defensive.

The talks may also get pushed back by the virus, with the industry firmly behind proposed legislation to delay talk on any contracts that expired during the quarantine until 60 days after the end of a state of catastrophe declared on March 19.

Miners believe that failure to pass that bill could risk holding up talks even further and undermine the "key" mediator role of the government-appointed Labor Directorate, said Diego Hernandez, head of industry body Sonami, which represents mining companies operating in Chile.

"Failure to adopt this sort of measures would risk stalling negotiations," he said.

The workers are split over a delay. Opponents include the Mining Federation, which brings together most private mining unions, but other labor leaders say a delay could stop companies from using the "pandemic effect" as a negotiating tool.

For now, the union resistance and a lack of political consensus are holding up the bill. Government leaders are keen for the two sides to reach an accord to prevent debilitating strikes like ones that crippled Chile's copper sector in the past.

"We hope that workers, union leaders and companies can reach agreements that benefit both parties, as has been done in recent years," Mining Minister Baldo Prokurica told Reuters.

Pandemic saps union clout as talks loom with Chile copper miners
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email