Mining sector operates with about 50% of its face-to-face endowment and actors project how much activity would fall in 2020

According to data from the Sonami, as a result of the escalation of the pandemic, currently 90 thousand workers in the industry are not going to their workplaces on site.

Little by little, the covid-19 pandemic has been hitting all productive sectors nationwide, and mining has been no exception.

And it is that the virus has knocked on the door of some workers in the sector, which has generated a significant reduction in the level of endowments of the various tasks in the country as a result of the sanitary measures that have been taken, thereby generating doubts regarding if they can continue to maintain their operating and production figures.

In fact, the international economic environment Bloomberg on Tuesday put on the table the concern that the market would have regarding whether the increase in contagions in the country could put a brake on copper production, considering that Chile currently generates 28% of the all of the red metal mined in the world.

Issue to which the President of the Central Bank, Mario Marcel, also referred to two days ago, explaining that a partial stoppage of the mining operation would generate “a greater impact” on the already resentful national economy.

Therefore, he said, “it is important that the industry itself has and guarantees safety conditions for its workers to minimize the risk of contagion and so that it can maintain its continuity even when some investment projects are being postponed until conditions are more normal ”

In this last point, Marcel made reference to the Codelco case, which reported its decision to stop all its projects in the Antofagasta Region, together with explaining that in the Chuquicamata Division it will be operated only by Calama workers. At the same time, he indicated that it was agreed with the workers of the El Teniente Division 14×14 working days, that is, 14 days of work and 14 days of rest.

As the president of the National Mining Society, Diego Hernández, commented to Emol, the industry as a whole has “adopted all the measures and control protocols of its workers and contractors to avoid contagions in their tasks.” That said, he explained that currently mining is operating “with just over 50% of its face-to-face workforce,” with “more than 90,000 demobilized workers at the moment, who in many cases are doing remote work.”

A figure similar to that handled by Juan Carlos Guajardo, executive director of Plumining, who commented that although at the start of the pandemic in the country most mining companies had reduced their allocations by an average of 30%, today that figure “is it has deepened to an estimated 45% reduction. ” “Reduced allocations mean greater demands for the operation, although until now it has been notable that production has been maintained. In the short term, however, the effects that this has on workers must be observed, as well as on deferral of preparation activities that may weigh on future production, “he added.

While the executive president of the Mining Council, Joaquín Villarino, stated that “all large mining operations are operating, but with less staffing,” noting an average reduction in workers of between 30% and 40%. He also indicated that Calama is the area of ​​the country where “more demanding” sanitary measures have been implemented.

Drop in production

On the other hand, Hernández stressed the “key role in the country’s economic and social development” that mining plays, stressing that, if the sector “achieves operational continuity in this year 2020, we will be very well positioned to normalize our operations during 2021 and thus contribute to the reeganche of the national economy. ” Until now, he continued, “we have achieved a production very close to normal and we hope to continue doing so for the rest of the year.”

Thus, it projected a “slight fall” in mining GDP in 2020, considering the significant copper production -which explains 90% of the sectoral GDP- achieved in 2019. “With the data to date, we expect a limited fall in mining GDP on this year, no more than 2% “, he pointed out.

Meanwhile, Villarino, from the Mining Council, pointed out that “data from external studies have provided figures about the consequences that the coronavirus could have, indicating that for this 2020 there could be a 5.5% drop in copper production.” That, he said, “on the understanding that there is operational continuity. Now, if this factor changes, the effect could be greater.”

Copper price

As for whether an eventual slowdown in the operations of copper mining in Chile could cause an effect on the price of red metal, the union leader assured that “we are facing a scenario marked by uncertainty and with considerable volatility in the price of copper (…). As long as the outcome of this pandemic remains inconclusive, we must continue to deal with a volatile market. ”

Regarding the same, Hernández maintained that “we must bear in mind that Chile currently generates 28% of the total production of copper from the mine, so that if eventually, for sanitary reasons, any of our operations had to be suspended, this could affect the price by pressing it upwards or by putting in a retaining wall in the event of a drop in the price. ”

While Guajardo said that “it seems to me that the market had been internalizing in the price a possibility of lower production due to the greater cases of Covid-19, especially in Chile and Peru, but if the restrictions in Chile are extended, the tendency to hike gets stronger. ”

Source: EMOL

Translated with Google Translator