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Codelco Restarts Top Copper Mine as Workers End 4-Day Strike

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April 1 (Bloomberg) -- Codelco, Chile’s state-owned copper producer, reached an agreement with workers to end a four-day strike and resume operations at its largest mine today.

Protests over the handling of a fatal accident at the Radomiro Tomic mine ended after mine manager Francisco Carvajal stepped down from the position. The return to work was confirmed today by a Codelco official briefed on the agreement who isn’t an authorized spokesman.

The stoppage caused “substantial” losses, Chief Executive Officer Thomas Keller told reporters in Santiago yesterday. Codelco isn’t concerned that it will miss mid-term supply commitments, he said, speaking just hours after the union threatened to expand protests to all Codelco copper mines, which account for more than 1/10th of the world’s supply.

“Radomiro Tomic traditionally contributes the most to the company’s profits, so effectively the resources we stop generating are substantial,” Keller said yesterday. “Our concern right now, before we start calculating how much this truly is costing, is restarting activities as soon as possible.”

Radomiro Tomic in the Atacama Desert produced 427,800 metric tons last year, or about 25 percent of the company’s total. Output also has declined at Codelco’s third-most productive division, Chuquicamata, which processes mineral from Radomiro Tomic, copper federation representative Juan Olguin said by phone yesterday morning.

‘Stronger Stance’

“We are taking a stronger stance and may protest nationwide,” Olguin said at the time. “Executives responsible for the accident must permanently leave their posts. We don’t want to see them leave only to return.”

Julio Aranis Vargas, vice president of northern operations, temporarily replaced Carvajal, Codelco said in a statement posted on its website March 30. Carvajal’s decision to resign as mine manager was his own and he will remain within the company, Keller said yesterday.

Codelco also is facing trouble exporting metal, as unionized port workers on March 16 started protests at the Angamos port for better working conditions. The company said March 28 it had stored about 30,000 tons that was due to be shipped from the Pacific Coast facility.

Dock workers at Angamos and the central Chilean port of San Antonio continued a strike today, Angamos workers union president Richard Orellana said by telephone today.

Wage Talks

Port unions will meet with the management of operating company Ultraport today to seek an end to the conflict over lunch breaks and pay, Orellana said. Ultraport operates 20 ports in Chile, including copper terminals at Angamos, Antofagasta and San Antonio.

The setbacks come as Keller embarks on a plan to spend $25 billion over the coming decade to revamp Codelco’s mines, some of which are a century old. Codelco produced 1.76 million metric tons of copper last year, a 2 percent decline from 2011.

With the investments, Codelco can exceed production of 2 million tons. Without it, output will slump to 800,000 tons, as ore quality declines at sites such as Chuquicamata, the company has said.

To contact the reporters on this story: Randall Woods in Santiago at rwoods13@bloomberg.net; Matt Craze in Santiago at mcraze@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net; James Attwood at jattwood3@bloomberg.net

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