Chile’s state-run mining company, CODELCO. the largest copper-producer in the world, began a nation-wide strike on Wednesday, in response to plans to shut down a foundry that employs 350 people.
Although the strike ended Thursday, it underscored the volatility of the copper industry, as it threatened to cost CODELCO $20 million per day, as it cut off 8% of the world’s copper supply overnight. Copper is vital to the new green economy, where it is used extensively in electric vehicle manufacture, including in China, which is the top Chilean copper importer.
Agence France-Presse (AFP) reported, “Police said they arrested 18 people as striking workers, waving Chilean flags and setting tires on fire, blocked entry to six mining facilities around the country. They did this mainly at the Ventanas foundry, which the government announced last week that it would shut down. Union leaders said the strike had paralyzed Codelco altogether but [Chile] Finance Minister Mario Marcel said it had ‘altered’ production but not shut it down.”
CODELCO supplies roughly 8% of the world’s copper supply, and that copper supplies roughly between 10% and 15% of Chile’s GDP. The Federation of Copper Workers, an umbrella organization of CODELCOs union, estimated the strike would cost CODELCO about $20 million per day.
Although the strike was initially begun on an indefinite basis, it ended within 24 hours as an agreement with CODELCO’s owners was quickly reached.
FTC President Amador Pantoja said, “Thursday’s agreement does not include more investment in the troubled Ventanas smelter [poised to shut down], but it involved strengthening the Ventanas copper refinery.”
CODELCO Interim Chief Executive Andre Sougarret said that as part of the agreement, the company will open a dialog with the workers at the Ventana foundry beginning June 27th, about the plant’s eventual closure.
Sougarret said, “We’re with the workers; we plan on meeting their demands,” adding, “retraining, relocation and exit packages were on the table for workers currently employed at the smelter.”
Reuters noted, “Closing the smelter will take years, according to Sougarret and the process is reliant on Congress modifying a law that forces the company to use the Ventanas smelter, which could take months.”
Copper and lithium, two metals used heavily in electric vehicle production, comprised nearly 84% of Chilean exports last year.
