The mining company said it will make efforts to maintain its productive level so as not to affect the resources it generates for the country. Among the paralyzed works are the final tasks of the underground Chuqui project.

The death of a second worker by covid-19, this time from the Ministro Hales division, one of the five operations in the Antofagasta Region, forced Codelco to completely stop the execution of projects in the so-called North District, which is made up of the Chuquicamata, Ministro Hales, Radomiro Tomic and Gabriela Mistral divisions.

The state-owned company yesterday also announced a further reduction in the endowment that carries out mining work in the Chuquicamata mine, one of the state-owned operations that would concentrate the greatest number of positive cases of coronavirus, according to complaints from the unions of those mine sites.

“As part of the measures to face the covid-19 health emergency that affects the country and particularly the Antofagasta Region, Codelco finds it necessary to halt the construction of all its projects in the area and operate the Chuquicamata Division only with Calama workers, ”the state miner said in a statement.

In May, the corporation had reduced the activity in the projects and cut the allocation in all its tasks by 30%, for which it applied the telework modality. Now, in Chuquicamata they will withdraw another 15% of the endowment in mining production tasks and, in practice, this will imply that Codelco’s former main task in terms of production will operate with 55% of its endowment. Currently this mine operates simultaneously on the surface and underground, from the transition project inaugurated about a year ago.

“The operation of the Chuquicamata Division, which from now on will be carried out only with personnel resident in Calama, will make efforts to maintain its productive level so as not to affect the resources it generates for the country,” said the company.

The state-owned company added that the demobilization of the operators will begin to be implemented immediately or to the extent that the current shifts end, and “will allow for a decrease in travel from other regions and a reduction in the density of its own staff and that of employees”.

The paralysis of the projects supposes the total suspension of the remaining and final works of the Chuquicamata Subterranea project and other initiatives under development in the other divisions.

The Federation of Copper Workers, an entity that groups all Codelco unions, issued a statement in which they value the measure adopted by the company, but insist that this is insufficient action. For this reason, they raise the need to meet with the Minister of Health, Enrique Paris, to discuss the health control protocols that the mining industry in general and Codelco in particular are applying.

“Under no pretext, we will accept the production and any objective of the mining business of Codelco, if they are not guaranteed, by the highest standards, urgent prevention measures that mitigate the impact of the coronavirus on the workers of the corporation,” he declared. The FTC yesterday, hours before the decision of the state company was known, an opportunity in which they demanded greater control by the authority of the sanitary measures adopted.

Impacts on production, price and Imacec

The fact that Codelco’s largest division begins to operate at almost half machine and paralyze its investment projects in the Antofagasta Region, is no less. According to data from the Chilean Copper Commission (Cochilco), the Chuquicamata, Radomiro Tomic and Ministro Hales divisions represent about 47% of the state’s total copper production. Thus, between January and April this year, the first one produced 236 thousand tons of copper, marking a slight drop of 0.4% in 12 months.

Given this scenario, the executive director of the consultancy Plusmining, Juan Carlos Guajardo, explains that a large part of Codelco Norte’s workers live in Calama, therefore, the impact should not be so significant compared to other mining operations.

“If the endowment is reduced 45%, the deferred effects increase, since there is a greater demand on the workers who continue operating and it becomes more difficult to prepare for the future exploitation of the mine,” says Guajardo.

For her part, BCI chief economist Francisca Pérez warns that copper production should decrease significantly and this will further affect the global mining outlook, which is already hurt. “You should see effects on prices,” he adds. Thus, Pérez estimates that the paralysis of investments will mean that in the medium term the supply would be negatively affected and the expected price for the coming years could rise.

Another effect that this situation will have, anticipates the chief economist of Banchile, Carolina Grunwald, is on the side of the mining Imacec in June, since “logically” it will go down. “It is a blow, finally, also on the investment side. Construction on projects stops, which if it is not recoverable, is less GDP growth for this year ”, she points out.

Pérez, complements: “The lower production of Chuquicamata could have a negative effect on the Imacec in June, although rather less, since it must be taken into account that it is only 10 days, and mining within the Imacec weighs about 12%” .

Source: El Mercurio

Translated with Google Translator