Mining companies monitor quarantine expansion and evaluate actions to maintain operation

“The most likely scenario is that events in Chile affect the price of copper,” says expert Juan Carlos Guajardo.

The communes of Antofagasta, Tocopilla and Mejillones will join the confinement measures that are already applied for more than 10 million people in the country starting at 22:00 hours tomorrow to try to control the expansion of the coronavirus.

The Minister of Health, Enrique Paris, said that the decision responds to the strong increase in cases observed in recent weeks in that northern region, one of the main mining districts of Chile.

According to the last epidemiological report delivered by the portfolio, the Second Region adds 5,989 confirmed and probable Covid-19 cases, while the death toll amounts to 189 people.

The decision, which reinstates the quarantine in Antofagasta and Mejillones, took place after increasing complaints of crowds in different parts of the region, such as airports that receive an intense flow of workers from mining companies.

On Friday the Ministry of Health had already announced the extension of the quarantine in the city of Calama and Codelco reported on Saturday the cessation of construction works for all its projects in the Northern District, and that the Chuquicamata Division will operate exclusively with Calama workers to reduce the displacement of personnel from other regions.

The total endowment of the Chuquicamata Division -considering own workers and contractors- thus decreases by 45%, when it had already dropped by about 30%.

Mining companies take actions

Although the mining companies operating in the area acknowledge that they have taken the necessary measures, they do not rule out new actions, so the next few days will be decisive.

In BHP, the increase in infections was addressed last week. Considering the stressful condition of the health system in the Tarapacá Region, Cerro Colorado decided, temporarily, to continue operating only with personnel resident in Tarapacá from June 15.

“This measure means a further decrease in the endowment of the operation, which was already at 70% of normal, to reach approximately 35%,” they said, adding that direct workers and collaborating companies impacted by this They will maintain their working conditions during the period that the instruction is extended.

From Sierra Gorda SCM, a site linked to the international KGHM and Sumitomo, which is located in the commune of the same name, in the Antofagasta Region, they assure that they have performed well with a total of 57 workers confirmed by Covid-19, which which represents only 1.56% of its endowment. For this reason, they have not been forced to operate exclusively with personnel from the area, despite the fact that only 40% of the staff is from the region.

To tighten security measures and protect workers’ health, they chose eight measures among more than 30 to elevate their category to “rules for life”, which in practice implies that their non-compliance could imply immediate dismissal.

Charter flights were also contracted for direct transfer to the Calama airport. This last point is monitored considering the requests of the communal chief and union leaders of other mining companies to close the airport in that city due to the increase in infections.

If this materializes, from Sierra Gorda SCM comment that to maintain operational continuity they would have to fly to Antofagasta and then transport the workers by land. Considering the extension of the quarantine, they will evaluate an eventual reinforcement of the measures and will monitor the logistics, warning that the efforts have implied a significant increase in costs.

Expectations for copper

The authorities’ measures will not go unnoticed by the market. This is stated by the director of Plusmining, Juan Carlos Guajardo, who ensures that “the most likely scenario is that the events of recent days in Chile as a result of the health crisis have an impact on rising copper prices.”

The expert highlights that the companies have already adopted a series of control and containment measures that have been successful. However, “the problem is that the areas surrounding the operations have high levels of infection and also the severity of the crisis throughout the country makes it difficult for mining companies to remain outside and therefore operational continuity is increasingly complicated” .

Source: Diario Financiero

Translated with Google Translator