About 3,200 unionized workers at Codelco’s
Chuquicamata copper mine in Chile downed tools on Friday after failing to reach
a deal with the company, the world’s largest copper producer.
The state-owned miner’s final offer, put
forward on Wednesday, included a 1.2% salary rise and a one-time benefits
package, worth around $20,000, but didn’t address issues related to medical
expenses, pensions and fair treatment of workers.
Codelco had said the contract proposed was
the most “serious, responsible and realistic” it could make to avoid possible
production disruption, in light of global copper supplies being extremely tight this year.
The company is in the midst of a
$5.6 billion project to turn century-old Chuquicamata, its second largest
copper operation by size, into an underground mine.
The last blast at the bottom of the open
pit was carried out in November, though copper extraction goes on.
The company has said it plans to gradually decrease activities
Chuquicamata’s switch is part of
Codelco’s 10-year, $39 billion-overhaul of its core assets, and is
expected to extend the iconic mine’s life by at least 40 years. It will also
allow the copper giant to keep up production rates, despite falling ore grades
and increasing costs at its operations.
Annual production from “Chuqui” — as locals
call it — once it has fully transitioned to underground extraction is projected
to be 320,000 tonnes of fine copper and 15,000 tonnes of molybdenum.
Codelco, which hands over all of its
profits to the state, holds vast copper deposits, accounting for 10% of the
world’s known proven and probable reserves and about 11% of the global annual
copper output with 1.8 million metric tonnes of production.