Force majeure: Codelco says losing 'substantial' output at its biggest mine
Chile's copper giant Codelco on Sunday said it is losing a "substantial" portion of its production as a strike at its Radomiro Tomic open pit mine in northern Chile enters a second day.
Workers at the mine, which last year was the most productive in Codelco's stable with output of 428,000 tonnes, downed tools on Saturday over a fatal accident that happened last week and which they blame on mine management.
Codelco CEO Thomas Keller told reporters Rodomiro Tomic's head will leave the mine, but will stay on with the state-run company.
Keller added that despite declaring force majeure on Saturday, currently the company has "no problem with [its] delivery schedule over the medium term."
Codelco has also been hurt by a two-week strike at the port of Angamos which handles copper cathode shipments from Radomiro Tomic as well as its Chuquicamata and Gaby mines.
On top of that the umbrella union for Codelco's workers is planning a 24-hour stoppage at all units of the Santiago-based company for April to protest management performance. The company was hit by a one-day strike in July 2011 that cost it $40 million.
Codelco – by far the largest producer of the red metal worldwide – plans to invest around $5 billion in 2013 to expand operations and replace depleting mines which has seen its overall output fall by more than 5% last year.
Copper was last trading at $3.39 a pound, down 5.8% so far this year and more than 25% below its peak of 2011.
At these levels the price of copper is still well above the marginal costs of most producers which are in the $2.75 – $3.15 a pound range, but many market observers see a further slide in the price as global production increases after years of static output.