Codelco Says Smallest Mine’s Viability Imperiled by Protests

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  • Protesters blocked access to workers who had accepted offer
  • Codelco offered workers wage increase limited to inflation

The Salvador copper mine closed on Monday as a strike by some workers triggered protests that prevented others from entering, with owner Codelco saying the stoppage threatens the mine’s feasibility.

As members of Union No. 2 downed tools after rejecting a final pay offer, a group of about 60 people, some of them wearing hoods, took over a section of the mine site in northern Chile, the state-owned miner said in a statement. Operations remained shut at about 5 p.m. Santiago time, Union No. 2 President Patricio Elgueta said by telephone.

With copper prices down more than 30 percent in the past two years, Codelco offered a wage increase limited to inflation, as well as signing and efficiency-related bonuses. The company’s smallest mine is battling to turn a profit after deteriorating ore quality pushed up costs almost five-fold in the past decade.

“As is public knowledge, the general situation at Salvador is critical,” Codelco said in the statement. “To impede work at the Salvador division -- at a time when we need to guarantee its continuity, increase production and intensify efficiency efforts -- prevents us from ensuring its viability.”

Codelco is negotiating a new contract with 1,130 workers at Salvador. Last week, members of Union No. 2 voted 346 to 228 against the offer, while Union No. 6 voted 292 to 110 for it.

In the next nine months, Codelco is scheduled to renegotiate contracts with about 5,200 workers. Most of them are in Chuquicamata, its third-largest mine that produced 149,000 metric tons in the first half of the year. Salvador’s first-half output was 29,000 tons.

Separately, Anglo American Plc requested an extension to the negotiating period with workers at its Los Bronces mine in central Chile, two people with knowledge of matter said late Friday. During the regular negotiation period that expired last week, Los Bronces workers had rebuffed the company’s offer.