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General Market Commentary
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General Base Metals
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General Market Commentary
Workers at Chile’s Escondida copper mine, world’s largest, to down tools
Unionized workers at Chile’s Escondida copper mine, the world’s largest, will stage a 24 hours-long strike on Tuesday in solidarity with ongoing massive protests sparked by a now suspended metro fare hike, as locals vent their discontent over the high cost of living and extreme inequality in one of Latin America’s most stable nations.
Union No.1, representing about 2,500 mineworkers, has called miners across the country to join the labour action in order to “paralyze all mining in Chile, until military and oppressive forces are removed from the streets,” according to a statement published by local press.
Umbrella group of unions and mining federations, CTMIN, echoed Escondida’s workers cry and is calling for a general mining strike on Oct. 23. It has especially asked its members to “protect their families and demonstrate peacefully for a fairer society.”
CTMIN includes the Federation of Unions of Antofagasta Minerals (FESAM), Federation of Supervisors of Private Mining, federation of Codelco professional workers FESUC. Another organization signing the statement is mining federation FMC, which includes unions from Collahuasi, Anglo American’s Los Bronces, Teck’s Quebrada Blanca, Antofagasta’s Los Pelambres and Zaldivar, Freeport’s El Abra and BHP’s Spence.
The planned stoppage risks disrupting copper supply from the world’s largest producer, with ports already being impacted by protests. Copper exports make up for about 60% of Chile’s earnings.
“Strikes are not uncommon in Chile, which explains why the impact on copper price thus far has been limited, BMO Metals analyst, Colin Hamilton, writes. “However, the bigger issue may be the pressure from the unions on the government to increase the royalty level on copper concentrate exports to fund public projects. This would further dissuade investment in Chilean mine developments, in a sector where copper output has essentially stagnated since 2004.”
The protests began last Monday when, alleging high fuel prices and the devaluation of the peso, the government announced a 4% increase in subway fares. After declaring a state of emergency due to the civil unrest caused by the measure — which was also announced a few weeks after a 10% hike in electricity bills was put in place — President Sebastián Piñera suspended the fare hike on Saturday.
However, ongoing clashes between authorities and protesters have not stopped, resulting in at least eight deaths and hundreds of arrests, as well as looted supermarkets, burning buses and charred underground stations in capital Santiago and other major cities.