Copper Giant Codelco Strikes Deal with Workers at Ministro Hales

Number-one copper producer Codelco announced on Saturday (December 1) that it has reached an agreement with workers at its Ministro Hale operations in the Antofagasta region of Chile.

In the release, Chilean state-run Codelco reported that 53 percent of workers at the mine voted to accept an offer, which took effect on that day.

The general manager of the Ministro Hales Division, Jaime Rivera Machado, said that the agreement “ensure[s] the viability of the company and the employability of our people.”

According to the release, the collective bargaining agreement is valid for 36 months, and includes a pay rise of 1.2 percent and a collective bargaining bonus of up to 7 million pesos — or around US$10,000.

The agreement also includes “incentives for the improvement of effective working hours, productivity and renewal of working hours.”

Ministro Hales, which was opened in 2014 and inaugurated in early 2016, is the newest fully operational Codelco mine, and is touted as its most technologically advanced mine, producing copper and silver.

In 2017, the mine produced 215,086 tonnes of copper and 126 tonnes of silver.

Last week, Codelco reported that a 5-percent decline in copper grades across its mines had resulted in a 3-percent drop in production for the first nine months of the year.

Total production for the period was reported at 1.2 million tonnes of copper, and earnings were US$1.42 billion before tax, down from US$1.6 billion the same time last year.

Production costs were also up with the lower grades, at US$1.39 per pound, though Codelco said that this was 5 percent below the average for the rest of the mining industry.

Codelco CEO Nelson Pizarro said that a higher copper price helped offset higher costs and lower grades.

In 2017, copper spent most of the first half of the year below US$6,000 a tonne, while in 2018 the red metal spent the first six months around or over US$7,000, only falling below US$6,000 when the US-China trade war locked in over June and July.

As of November 30, copper was back up at US$6,237 a tonne.

The company also provided an update on upgrade works across its projects, with the underground overhaul of its Chuquicamata project now 68.9 percent complete, while works at its Andina operations are over 60 percent complete.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.