Hidden costs of maintaining production in pandemic begin to emerge in the copper industry Chile

The copper industry in Chile, the world’s largest producer, is nearing a turning point as the coronavirus expands in the South American country, say workers and analysts polled by Reuters, revealing the hidden costs of policies that have so far production protected.

Since the beginning of April, the main mining companies in the world, including the state-owned Codelco, BHP, Anglo American, Glencore and Antofagasta, have reduced their on-site allocations in the Chilean deposits and, however, so far have produced more copper in the midst of the pandemic with respect to the last year.

But the cracks are starting to appear, Patricio Elgueta, president of the Federation of Copper Workers (FTC) that groups Codelco unions, told Reuters. According to the leader, despite being tired and fearful of contracting the virus, the miners continue to work.

Elgueta said the unions were weighing a proposal for a regional table of health workers, politicians and social groups to reduce production to the “minimum” in all mines around the northern city of Calama, at the epicenter of industry, to allow adequate sanitation measures.

Furthermore, he said that the emphasis on major mines had shifted almost exclusively to mineral processing as they are operating with around 40% of their staff.

“You focus on the productive issue and neglect maintenance, but that in the long term is unsustainable,” said Elgueta. “First you exhaust the workers, second you can cause damage to the equipment and a third concept is that obviously we will have delays tomorrow.”

Juan Carlos Guajardo, head of the Santiago-based consultancy Plusmining, told Reuters that “we are at the worst moment of the health situation in relation to the mining industry.”

“We have dangerously approached an edge where the room for maneuver is already very, very limited,” he added.

The specialist said that the policy of “saving time” by reducing personnel and applying stricter security protocols had been successful, but that the measures were now reaching the miners. “We bet that the health situation was going to be manageable, but that could not be done,” he said.

Chile registers more than 284,000 coronavirus infections and the pandemic has worsened in recent weeks in the north of the country in cities such as Antofagasta and Calama, a desert region where more than half of the country’s mining production is concentrated.

The CTMIN coordinator, which groups Codelco unions and private companies, said this week that it had confirmed nine deaths from COVID-19 throughout the industry.

Liliana Ugarte, head of union 2 of Codelco’s Chuquicamata mine, located in the surroundings of Calama, told Reuters that it was time to “adjust production plans according to the endowment that currently exists.”

The head of the state company, Octavio Araneda, said in an interview with the newspaper El Mercurio on Thursday that any other restriction on mining would be “catastrophic” for the Chilean economy and that the company had been proactive in dealing with the virus. Codelco delivers all its profits to the State.

Plusmining’s Guajardo said the worsening situation would lead his group to revise their April estimate of a 320,000-ton reduction in copper production in the country.

Avalanche of cases

Increasing pressures have led the government to intensify mine surveillance and inspection as well as restrict movement throughout the region.

In a letter sent this week to Health Minister Enrique Paris, the Calama community and social groups warned of an “avalanche” of cases in the area and demanded a “14-day quarantine” in regional mining activity “with an arrest scheduled of its operations and production processes ”.

The lawsuit would go against the goal of Sebastián Piñera’s center-right government, which has advocated a “balance” between protecting workers and keeping production on its feet.

Mining accounted for 9.4% of the country’s GDP in 2019 and more than half of exports by value.

Mining Minister Baldo Prokurica said the industry was key to supporting two massive economic emergency plans against the coronavirus that together represent 11.7% of GDP.

Source: Reuters

Translated with Google Translator