April 8, 2013 / 3:16 PM / 5 years ago

UPDATE 4-Chile Codelco copper mine workers to strike on Tuesday

* Copper rises on planned strike in mining powerhouse
    * Unions criticize worker deaths, use of contractors
    * Electoral year seen galvanizing union labor action

    By Felipe Iturrieta
    SANTIAGO, April 8 (Reuters) - Chilean state miner Codelco's
 unionized workers said on Monday they would conduct a
24-hour work stoppage at all units of the world's top copper
miner on Tuesday for safety improvements and greater job
    The union representing Chile's private miners, which include
BHP Billiton, Anglo American and Antofagasta
Minerals, initially said it would also strike to halt
output from world No.1 copper producer Chile. 
    But union leader Gustavo Tapia said later individual mine
unions would decide on their own whether to join. Sources from
private mines in the Andean country told Reuters they were
likely to see milder labor action, such as one-hour shift
delays, as unions sought to avoid legal problems. 
    The effects from the planned strike will be "marginal,"
Codelco's chief executive Thomas Keller told reporters earlier
on Monday. Codelco is seen producing around 1.7 million tonnes
of copper this year, or an average of just under 5,000 tonnes
per day. 
    A 24-hour strike at all of Codelco's units would cost $35
million, Gustavo Lagos, mining professor at the Universidad
Catolica told Reuters. 
    At stake more widely in Chile is a third of the world's
copper production. The country is seen producing 5.58 million
tonnes of copper this year, or an average of roughly 15,000
tonnes per day.
    Copper prices rose on Monday, rebounding from falls the
previous week, in part as the planned strike raised concerns
over temporary supply constraints. 
    "I expect the principal short-term impact to be primarily
monetary. There will likely be delays in shipments and
settlement payments," said Colin Becker, mining partner with PwC
in Santiago. "However, these events are like exposure to the
sun. It is not only another sunburn, but rather there are also
long-term impacts to the mining sector's health. All this does
is make Chile a little bit less competitive." 
    While Chile boasts enviable copper reserves, miners are
reeling from steep costs, tumbling ore grades and an uncertain
power supply. 
    Extending the strike or adding extra measures "will depend
on the response by Codelco and authorities," said Raimundo
Espinoza, head of the powerful Federation of Copper Workers
umbrella union group.
    "We're hoping for concrete answers from Codelco with regards
to the demands we've made," he said during a press conference.
    Espinoza, who sits on Codelco's board, also lamented that
"more than 70 comrades have died" in Chilean mining accidents
since October 2010, when 33 miners were successfully rescued
from underground in a globally-broadcast event. 
    Chile's November presidential elections are seen galvanizing
labor action as unions seek to make their issues heard. For
analysis, see 
    The planned strike will hit just as the copper industry is
gathered in Santiago this week for the CESCO/CRU copper
conference, the world's biggest gathering dedicated to the red

    Memories of a shock two-week strike at Escondida in 2011 are
fresh, and union activity could prove a growing pain for Chilean
mining companies, which are already battling soaring prices,
slipping ore grades and energy woes.  
    While stoppages in 2011 often sought a wider share of record
copper prices, workers now say they fear being displaced by
subcontract workers, losing their jobs, or seeing their benefits
cut as companies seek to rein in spiraling costs.  
    Keller said earlier Monday that he does not expect potential
labor strife during an electoral year to have any significant
impact on copper production. 
    Codelco has restarted its copper shipments following the end
of an extended port strike, though it will take roughly a month
for a normal rhythm to resume, he added.
    Most ports in Chile returned to normal operations on
Saturday after the extended strike, which hurt the world's top
copper producer's exports. Key ports in the mineral-rich North
are operational.
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