MAC: Mines and Communities

Policing Chile's copper

Published by MAC on 2011-05-30
Source: Business News Americas

As global copper prices take a dip, after reaching unprecedented levels over the past year, battle lines are being drawn in Chile, the biggest single source of the red metal.

Last week, a leading trade union federation accused the government of attempting to abolish the country's "so-called copper law" in order to make state-owned Codelco "more attractive to private investors".

At the same time, a Chilean research centre claimed that the copper industry was set to become first in the world to implement the international  environmental product declaration (EPD) reporting system.

This would, claimed the Centre, enable certification of the life-cycle environmental impacts of  specific production.

Last month however, Codelco's board refused to close-down a smelter which had been accused of poisoning local residents. For background, see: Pollution and gas leak hit community


Codelco's management policy facilitating privatization, union leader says - Chile

Business News Americas

26 May 2011

Management at Chilean state copper producer Codelco has been promoting a policy focused on lay-offs, precarious employment and outsourcing that is benefiting those interested in its privatization, the president of the company's supervisors union federation (FESUC), Ricardo Calderón, told BNamericas.

"The current management style is building up several conflicts with unpredictable consequences. We are calling on management to forge agreements towards the creation of a labor climate in line with the company's future growth challenges, in which contribution from current workers and professionals would have to be taken into account," Calderón said.

Codelco's decision to implement a new retirement plan at its northern Chuquicamata division for 78 of the 90 supervisors that have been declared "expendable" has been generating controversy, with the division's supervisors union insisting on relocation rather than retirement.

Management has relocated 12 supervisors at other operations in the northern district, but the supervisors union wants more to be included. However, management has insisted on the retirement plan and has already informed supervisors that they will be laid off, former Chuquicamata supervisors union president Grimaldo Ponce told BNamericas previously.

"The way management has implemented the new retirement plan, which could extend to a total of 1,000 supervisors and workers at the company by year-end, is disrespectful towards workers," the federation leader said.


It is also contradictory that the company is expected to continue growing through the development of four main projects worth a total of US$17.5bn within the next five years without a transparent, sound and continued source of financing for the investment plan, according to Calderón.

Codelco and the Chilean government must approve the reinvestment of profits as the only way to secure a sound financing system, instead of the sale of non-essential assets and the issue of debt, he said.

Ponce has also called on Codelco's CEO Diego Hernández to clearly state the company will not be privatized. "Everything that is being done, including the legislative attempt to abolish the so-called copper law, seems to be intended to make the company more attractive to private investors," he said.

"I respectfully call on Mr Hernández to rule out the company's privatization and to make its transformation process more humane," Ponce said.

Local copper industry to create, implement international environmental standards - Chile

By Victor Henriquez

Business News Americas

24 May 2011

The Chilean copper industry will be the first in the world to implement the international type III environmental product declaration (EPD) reporting system, local mining and metallurgical research center CIMM's industrial sustainability unit director Claudia Peña told BNamericas.

CIMM launched a project to implement the EPD standard in Chile's copper industry on Tuesday. The initiative aims to create a technical framework to standardize the red metal's sustainable production indicators so that products can be compared with their counterparts and receive certification on international markets.

"The use of the EPD system will allow copper products manufactured in Chile to differentiate themselves from others, as their environmental impact during their life cycle will be certified," Peña said.

An environmental declaration is defined in the ISO 14025 standard as quantified environmental data for a product with pre-set categories of parameters based on the ISO 14040 series of standards, but not excluding additional environmental information, the international EPD system's president Sven-Olof Ryding said.

The EPD system adds several new market dimensions for the environmental performance of products and services with key characteristics and guiding principles resulting in a number of advantages both for organizations creating EPDs as well as for those making use of EPD information, he added.

The project that CIMM will implement - together with the Universidad de Concepción and the government's scientific and technological development promotion fund Fondef - will involve the determination of the product category rules (PCR) for products such as copper concentrates, cathodes and wires, according to Peña.

PCRs are vital for the concept of environmental declarations and climate declarations, and set the standards to be used in the elaboration of EPDs.

"Being in the front line in determining PCRs for copper is a huge challenge for Chile, but will also grant the country a significant benefit as it will be in an advantageous position in terms of certifying its products' environmental impact," Ryding said.

Once PCRs are set and reviewed by the international community, the project will move on to the creation of standard EPDs for Chilean copper products, which will then be used by companies to certify their products' environmental footprint, Peña said.

Codelco board rules out closing Ventanas smelter - Chile

Business News Americas

14 April 2011

Chilean state copper producer Codelco's board has decided not to close or change the location of the smelting plant at its Ventanas division in central region V, local media reported on Thursday.

Earlier this week, Codelco chairman Gerardo Jofré was reported as saying by local paper Diario Financiero that the company was open to evaluating the closure of the smelter and just continuing copper refining at the complex.

"[Moving the smelting plant to a new location] is one of the options we are evaluating. Ventanas has a problem as it is based in a very complicated location and the smelting plant is generating most of the problems related to contamination. The refinery can stay there as it has no polluting emissions," Jofré said.

In the end, the board decided to accept recommendations made by management, which considers the Ventanas smelting-refinery complex as a strategic asset, according to more recent press reports.

Company representatives were unable to comment on the board's decision when contacted by BNamericas.

The decision could have been prompted by the desire to avoid affecting the workforce at the division, a source linked to the process told BNamericas.

Ventanas' smelter is a relatively small operation with capacity to process close to 400,000t/y of copper concentrates, according to Codelco's CEO Diego Hernández. The plant smelts copper concentrates from its nearby Andina division and from state minerals company Enami.

Enami's concentrates, produced with copper ore acquired from small and mid-sized miners, occupy 35% of the smelter's capacity.

The refining plant at the complex is one of the largest in the world and processes copper from the smelting plant and anodes supplied by the Caletones smelting plant in region VI's El Teniente division.

Ventanas is the least profitable of Codelco's divisions, generating a loss of US$146mn in 2010, according to the company's results report.


An appeal aimed at overturning a ruling from Chile's region V appeals court which allowed the continuity of operations at the smelter in Ventanas was rejected by the supreme court, a source from the latter confirmed to BNamericas.

Following a sulfur dioxide leak on March 23 at the smelter, an environmental group from the Puchuncaví district - where the plant is located - and a group of relatives of former workers filed an appeal for legal protection, requesting that operations at the smelter not be resumed without a guarantee that a similar incident could not take place again.

The court declared the legal protection request admissible on March 30 and issued an order similar to an injunction that requires operations to proceed as they were at the time of the request so that a thorough investigation can be carried out.

Codelco then filed an appeal before the court asking for clarification on the ruling and, secondly, requesting that the court reconsider its decision based on new information about the incident submitted by the company. Codelco argued that the company could not halt the resumption of operations as that process was already completed.

As a result, the plant was allowed to continue operating while the investigation advances.

No other requests to halt operations at Ventanas can be submitted, according to the supreme court.

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