Chile’s Copper Industry Sees Reduced Risk of Strikes After Labor Agreements
Chile's copper-mining sector is seeing a decrease in the risk of labor disruptions following the resolution of several significant wage negotiations. This development is crucial for a country that supplies approximately 25% of the world's copper.
Recently, around 300 workers who had been on strike at a mine operated by Lundin Mining Corp. returned to work, signaling an end to the industrial action. Just a week earlier, the primary union at BHP Group's massive Escondida mine ratified a labor agreement following a brief three-day strike. Additionally, Antofagasta Plc successfully reached an early wage agreement with the main union at its Centinela facility, completing its labor talks for the year.
Despite these resolutions, some labor contracts are still under negotiation, including those at Codelco's extensive El Teniente mine, which represents about 752,000 metric tons of copper supply. However, this is a significant reduction from the 3.35 million tons of supply at risk earlier this year, according to data from BTG Pactual.
"Supply risk derived from strike action is receding as most 36-month collective labor agreements have been fulfilled," said BTG Pactual analyst Cesar Perez-Novoa.
While companies have had to offer more generous terms to secure these contracts, the recent drop in copper prices from their record highs in May likely encouraged workers to finalize agreements. For the global market, the reduced risk of strikes in Chile is expected to alleviate concerns about a shortage of copper concentrate, the essential raw material for smelters.
