Chile copper workers begin nationwide strike over smelter closure

Chilean state-owned copper producer Codelco, the world’s largest, was hit on Wednesday by a nationwide strike against the miner’s decision to close permanently an allegedly polluting smelter in the country’s central zone.

Unions demand that, instead of shutting down Ventanas, the company upgrades it. Codelco’s decision followed an environmental incident that saw dozens of people fall ill, the miner said June 17. The move was later backed by Chilean President Gabriel Boric and several of his ministers.

About 50,000 copper workers, including Codelco’s employees as well as contractors, joined on Wednesday the indefinite strike, the Federation of Copper Workers (FTC), an umbrella group of copper worker unions, said in a statement.

The unionized workers insist the facility needs $53 million for capsules that retain gases and allows the smelter to operate under environmental compliance, but this was dismissed by the government.

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“Our action will continue as long as the government and the Codelco board of directors insist on the closure of Ventanas and do not greenlight the resources to allow the Codelco smelters to continue as competitive and sustainable units,” FTC president Amador Pantoja said, adding the company’s decision was rushed.

Responding to the Pantoja, Codelco’s chairman of the board, Máximo Pacheco, said the closing of Ventanas was 30 years in the making.

“We have been discussing environmental issues related to Ventanas for decades. Does anyone believe that after 30 years this was a hasty decision?,” he told CNN Chile.

Chilean President Gabriel Boric, who has been in power for a little over three months, has said he doesn’t want “more environmental sacrifice zones” in the country.

“Today there are hundreds of thousands of people living in our country who are exposed to severe environmental deterioration that we have caused or allowed, and that, as Chilean, makes me ashamed,” Boric said on Friday.

Historic reinvestment plan

Chile’s Finance Minister Mario Marcel said on Wednesday that Codelco operations have not been affected by the strike as the company had taken measures to mitigate potential negative effects.

The minister also announced an historic $583 million reinvestment plan for the copper miner this year, which includes 30% designated to 2021 utilities. There will be a similar reinvestment of utilities from 2021 through 2024, Marcel said.

Until now, Codelco has given all of its earnings to the state, which decided how much to return to the company.

“With Codelco facing significant capex bills over the coming years as it tackles ‘structural projects’, most notably the mine level transition at El Teniente, this funding is helpful for the company’s planning,” BMO commodities analyst Colin Hamilton said.

The expert noted that the investment benefits would be highly dependent on the copper price. “Even if projects are delivered on time, Codelco will struggle to keep copper output flat in the medium term,” he wrote.

Ventana’s closure will require the modification of a law that requires the Chilean copper miner to smelt minerals from the also state-owned Enami, coming from small and medium-sized companies, exclusively in the facility.

Codelco said that Ventanas’s refinery will not be affected by the measure.

Codelco ventanas facility
Codelco’s board of directors approved the closure of the Ventanas smelter on June 17. (Image courtesy of Codelco | Flickr.)