MAC: Mines and Communities

Codelco workers on 24-hour strike against privatisation and dismissals in Chile

Published by MAC on 2011-07-18
Source: Business News Americas, Reuters, statement

The strike affected all divisions of the state-owned copper miner

Codelco's operations completely halted, 16,580 workers adhere to 24-hour strike - Chile

By Victor Henriquez

Business News Americas

11 July 2011

A total of 16,580 staff workers from Chile's state red metal producer Codelco, the world's largest copper producer, took part in a 24-hour strike on Monday at all of the company's divisions, the president of the supervisors union federation (FESUC), Ricardo Calderón, told BNamericas.

The number corresponds to 15,480 operators, or almost 100% of workers that are members of the copper workers federation (FTC), and 1,100 of the company's roughly 2,500 supervisors, Calderón said.

In addition, 26,380 contract workers participated in the strike, he added.

Operations at the Chuquicamata, Radomiro Tomic, Salvador, Andina, Ventanas and El Teniente divisions and at the 99.9%-owned Gaby subsidiary were completely halted, with contingency shifts carrying out maintenance to ensure the smooth restart of operations, FTC president Raimundo Espinoza said.

The strike will result in the loss of around 4,900t of fine copper and around US$41mn in revenues, Codelco said in a statement.

Workers are upset by what they consider overt attempts to privatize the company, a lack of open dialogue with management and fears over labor stability.

Codelco's management has been setting the conditions for the privatization of the company by incurring an excessive amount of debt, while the government has approved a small amount of money for the reinvestment of profits, Espinoza said.

Workers are also demanding more participation in the restructuring of the company, which involves a US$17.5bn investment plan in four main projects aimed at increasing output from 1.7Mt/y to around 2Mt/y by 2020.

"We have been stripped of our power to take part in decision making. This is a warning strike to let management know we want to regain that power," Espinoza said.

The walkout started at around 5am on Monday and is expected to be lifted at the same time on Tuesday (Jul 12).

"Access roads were blocked and workers at all the divisions held marches and demonstrations to express their opposition to how management is running the company," Espinoza said.

"We have no plan to extend the walkout or declare it indefinite," he added.

However, more demonstrations and strikes could follow if management does not show a willingness to start including workers in the dialogue to decide the company's future.

Layoff Threat

Calderón said supervisors at Chuquicamata and Radomiro Tomic were threatened with layoffs for adhering to the strike.

"Currently, there are some supervisors at both operations because they were told they were going to be laid off if they took part in the walkout," Calderón said.

FESUC is making sure those supervisors are not being forced to carry out works not related to their skills, Calderón said, adding that if this occurred, the federation would submit a lawsuit before the labor office.

Illegal Strike

Mining and energy minister Laurence Golborne said the strike is illegal, since it is not part of a labor contract negotiation, and makes no sense as the government and the company's management have consistently ruled out any plans to privatize the company.

In a release, Codelco confirmed that operations were completely halted and that no violence had occurred at any division. The company regretted the strike and said that management has always been willing to maintain dialogue with workers.

Codelco workers mobilise against privatisation and dismissals in Chile

Copper miners hold a national 24-hour strike in protest at Codelco's privatisation plans.

Valeska Solis

IMF Metals

7 July 2011

The Copper Workers Federation (FTC), which represents miners' unions at Codelco, held a 24-hour strike on Monday 11 July. The strike affected all divisions of the state-owned company.

In a press release, the FTC, which is affiliated to the IMF, set out the three reasons why it called the strike:

The FTC also warned that any repression or dismissal of workers in response to this legitimate mobilization would be met by an indefinite strike.

One of the main reasons for the federation's action is the privatisation of mineral rights at the Gabriela Mistral mine, which is to become a limited company. "They have already changed the legal status of our mine, but they don't say so, we are actually now another company but they have said nothing. Neither are they admitting that losses from a 24-hour strike are nothing compared to the losses that will be caused if this state-owned company is sold and privatised", said Emilio Paez, president of the Gaby Miners' Union.

The IMF's Regional Office is closely following the struggle of the Chilean miners and has expressed its solidarity with whatever the FTC decides to do in pursuance of its demands.

Key Chile mine struggles for 3rd day due to strike

By Alonso Soto


6 June 2011

SANTIAGO - The world's fifth largest copper mine, Chile's El Teniente, worked at less than half of capacity on Monday as most workers stayed home for a third day to avoid violence by striking contractors, owner state giant Codelco said.

The mine slowed down operations late last week after temporary workers, on strike since May 25, threw stones at buses carrying workers to the mine. Police patrols escorted buses carrying a few hundred staff employees to the deposit on Sunday to work on a contingency plan that allows the 404,000 tonne-a-year mine to produce at 40 percent capacity.

The 13-day protest by thousands of temporary workers demanding higher wages could drag on as negotiations stall, raising fears of demonstrations spreading to other mines in Chile, the world's top copper producer.

The collapse of wage talks sparked violent protests last week, with contractors throwing rocks at buses carrying staff workers to the world's largest underground copper operation.

Protesters are calling on the government of President Sebastian Pinera to intervene to end the wage deadlock.

"This conflict is for real and employers better wake up and start paying up," said Luis Nunez, a protest leader. "The government has to step in because this is hurting the pockets of all Chileans."

Nunez said protesters will set up camps alongside the road that leads to El Teniente in the snow-capped Andes mountains.

Codelco is one of the state's main revenue earners with first-quarter profits of $2.3 billion after taxes.

Government involvement in the conflict could undermine efforts by Codelco to remain independent with labor and investment decisions taken by a nine-member board.

Codelco said the protest has cost Codelco about $30 million in lost revenue.

Problems at El Teniente, which produces about 2.5 percent of the world's mined copper, helped lift prices of the red metal used to build from homes to cars and power lines.

Three-month copper on the London Metal Exchange CMCU3 traded at $9,135 a tonne on Monday from a close of $9,099 on Friday.

Risk of Spreading

The demonstration draws comparisons to violent protests by contractors at El Teniente in 2007-2008 that spread to two other divisions and forced Codelco to halt operations there. Codelco ultimately caved in to their demands to end protests.

Direct negotiations with contractors at El Teniente this time around could raise wage expectations at other divisions and spark protests, a senior Codelco source told Reuters.

There is no evidence of protests expanding to other divisions, company and union sources said, although Codelco is closely monitoring any calls for salary increases at its other divisions including the 528,000 tons-a-year Chuquicamata mine.

Senior union officials said the protest is unlikely to spread immediately, but the risk is latent.

"This (protest) has so far been focused here, but I'm sure contractors at other divisions are paying close attention to how this evolves," said Guillermo Medina, leader of a staff workers' union at El Teniente.

Contractors are usually paid much less than their staff colleagues, a growing disparity amid record high prices of the metal that has triggered violent protests in Chile.

Contractors demand a bonus of $4,700 per worker, still only a fraction of the $32,000 in bonuses and soft loans that staff workers at El Teniente got to ink a wage deal in April.

A protest by subcontractors last year forced the world's No. 3 mine, Chile's Collahuasi, to halt operations.

Work at El Teniente

Emergency staff at El Teniente is using stocked material to feed mills and the unit's Caletones smelter, in a move to keep some operations running to prevent damage to machinery and furnaces.

The emergency operation could be kept for some time as staff unions have agreed to allow some workers to return to the job under strict security measures, union leaders said.

The transportation of copper to ports has not been disrupted by the protest, company sources said. Codelco has said it will keep honoring copper deliveries to clients.

El Teniente employs around 11,000 contractors, most of whom support non-production operations like reinforcing tunnel walls, repairing machinery and distributing food. The mine's 4,000 staff workers are directly linked to output operations.

(Reporting by Alonso Soto; Editing by Marguerita Choy)

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