chilean copper giant agrees to labour deal

Chilean copper giant agrees to labour deal
Heather Walsh



Bloomberg

SANTIAGO — Codelco, the world’s biggest copper producer, has reached an agreement with contract staff at its mines in Chile to end a strike of more than five weeks, a worker leader said yesterday.

Employees of contracting companies at Codelco had approved an accord that included bonuses and guarantees that striking workers would not be fired, said Luis Garrido, a spokesman for the Confederation of Copper Workers, which organised the walkout.

Contract workers at the Chilean government-owned Codelco went on strike on June 25 to demand higher wages after the price of copper more than quadrupled in four years.


“Labour protests will keep affecting companies as long as commodities prices are high,” said Guillermo Holzmann, a union consultant and professor at the University of Chile in Santiago.


Workers in Mexico at Southern Copper , the world’s fifth-largest producer of the metal, went on strike on Tuesday for higher pay.

A union at Chile’s third-largest copper mine won larger bonuses from mine owners Xstrata and Anglo American after a four-day strike last month.


The contract workers would probably return to Codelco mines today , said Emilio Zarate, a director at the confederation. Codelco’s contract workers burned buses, threw rocks at vehicles entering mines and erected blockades during the strike.


An end to the strike should enable Santiago-based Codelco to resume full production soon, executive president Jose Pablo Arellano said yesterday. Codelco produces about 10% of the world’s copper from mines.



Codelco yesterday resumed output at El Teniente, its second-largest mine, after protests caused a four-day shutdown costing about $36m in lost production.

The company’s smallest mine, El Salvador, has been shut almost every day since July 16.

Contract workers would end the blockade on Tuesday, Garrido said .


Contract workers perform maintenance, build infrastructure and provide transportation, food and cleaning services for Codelco.

Their salaries are less than those of Codelco employees, even when performing similar jobs, according to the confederation, an umbrella group for unions and non-unionised workers at contract companies.


Under the accord, contract workers will receive some back pay for days on strike, bonuses of 450000 pesos (about R6300) a worker and improved health benefits. “It’s a first step,” Zarate said .




Contract workers went on strike after Codelco’s unions, which are employed directly by the company, brought home record bonuses of up to 8,5-million pesos in the past year.


That payout is more than double Zarate’s annual salary for repairing equipment at a Codelco mine as the employee of a contractor. Zarate said he earned 3,24-million pesos a year, compared with an average salary of 3,78-million pesos for all workers in Chile.

Codelco said average salaries for contract workers were closer to 5,4-million pesos. Codelco said last month it had 28000 contract workers, compared with about 17300 regular employees.

The confederation said most contract workers took part in the strike, while Codelco said few workers did.


Codelco produced 1,68-million tons of copper from its own mines last year, and an additional 107000 tons from its 49% stake in Chilean mine El Abra.




Chile tumbled in a ranking of the best countries for mining companies to invest in following a union strike last year .