The mine avoided the impact of a general strike
According to Bloomberg News, Diego Hernandez, head of the Chilean Mining Association Sonami, said in a webinar on Wednesday: “I don’t think there are any particularly dangerous times.” He was answering questions about the risks posed by Chile’s tight collective bargaining agenda. The above answer was made at the time of the question. Chile's collective bargaining to some extent supported the rise of copper prices to a seven-year high.
The 72-year-old Hernandez knows the temperature of labor relations in giant copper mines. During his tenure as chief executive officer of Chilean National Copper Company (Codelco) and Antofagasta, as well as director of operations at the Escondida and Collahuasi open-pit mines in northern Chile, he oversaw dozens of salary negotiations, which were smooth and intense. .
Currently, his optimistic views are being staged. Only one medium-sized mine in Chile ceased operations due to a strike in the current wage cycle. Some other companies have to provide each worker with more than $20,000 in signing bonuses in order to reach an agreement at the last minute, because the union hopes to get a share of the soaring profits and fight the epidemic in return.
Nevertheless, in a country that accounts for a quarter of global production, intense wage negotiations in recent months have caused traders to try to calculate the risk of disruption. A series of other copper mines - including Escondida, the world's largest copper mine, and Los Pelambres, Antofagasta's largest copper mine - plan to negotiate with the union next year.
Hernandez pointed out that Codelco has successfully signed several early wage agreements without paying huge bonuses, which seems to be a “patriotic” approach of state-owned producers. He said that for private companies, the key is to manage expectations before negotiations begin.
Although the rare combination of high prices and weak local currency is increasing the profit margins of producers, they will seek to control costs in light of the expected increase in supply and the pandemic risk of demand.
