Workers at Chile’s Escondida copper mine, world’s largest, to down tools

Escondida is the world’s largest copper producing mine. (Image courtesy of BHP)

Unionized workers at Chile’s Escondida copper mine, the world’s largest, will stage a 24 hours-long strike on Tuesday in solidarity with ongoing massive protests sparked by a now suspended metro fare hike, as locals vent their discontent over the high cost of living and extreme inequality in one of Latin America’s most stable nations.

Union No.1, representing about 2,500 mineworkers, has called miners across the country to join the labour action in order to “paralyze all mining in Chile, until military and oppressive forces are removed from the streets,” according to a statement published by local press.

Umbrella group of unions and mining federations, CTMIN, echoed Escondida’s workers cry and is calling for a general mining strike on October 23. It has especially asked its members to “protect their families and demonstrate peacefully for a fairer society.”

Chileans are venting years of discontent over the high cost of living, expensive health care and extreme inequality

CTMIN includes the Federation of Unions of Antofagasta Minerals (FESAM), Federation of Supervisors of Private Mining, federation of Codelco professional workers FESUC. Another organization signing the statement is mining federation FMC, which includes unions from Collahuasi, Anglo American’s Los Bronces, Teck’s Quebrada Blanca, Antofagasta’s Los Pelambres and Zaldivar, Freeport’s El Abra and BHP’s Spence.

The planned stoppage risks disrupting copper supply from the world’s largest producer, with ports already being impacted by protests. Copper exports make up for about 60% of Chile’s earnings.

“Strikes are not uncommon in Chile, which explains why the impact on copper price thus far has been limited,” BMO Metals analyst, Colin Hamilton, writes. “However, the bigger issue may be the pressure from the unions on the government to increase the royalty level on copper concentrate exports to fund public projects. This would further dissuade investment in Chilean mine developments, in a sector where copper output has essentially stagnated since 2004.”

The protests began last Monday when, alleging high fuel prices and the devaluation of the peso, the government announced a 4% increase in subway fares. After declaring a state of emergency due to the civil unrest caused by the measure — which was also announced a few weeks after a 10% hike in electricity bills was put in place — President Sebastián Piñera suspended the fare hike on Saturday. 

However, ongoing clashes between authorities and protesters have not stopped, resulting in at least eight deaths and hundreds of arrests, as well as looted supermarkets, burning buses and charred underground stations in capital Santiago and other major cities. 

Brutal inequality

For the first time after the end of dictator Augusto Pinochet’s regime in 1990, the current centre-right administration has called the military onto the streets of Santiago on Monday, as it emerges from its third consecutive night of a government-imposed curfew.

“We are at war with a powerful, relentless enemy that respects nothing or anyone and is willing to use violence and crime without any limits,” the president, Sebastián Piñera, said on Sunday in a televised and unscheduled speech from the military headquarters.

“This had little to do with public transit. It became a situation about brutal inequality”

Rodrigo Booth, University of Chile Professor

Political scientist Guillermo Holzmann, at the University of Valparaíso, blamed “an accumulation of factors” for the protests. Frustration over the economy, the rising price of water, electricity and transportation — all these factors have played a part and are worsened by an increase in crime and corruption, he said.

“People feel the state is inefficient, it doesn’t protect them, and the market abuses them,” Holzmann noted. “The metro fare was the last straw.”

“This was an economic pressure cooker that’s been building for decades, and it exploded,” Rodrigo Booth, a professor at the University of Chile, told The Washington Post. “This had little to do with public transit. It became a situation about brutal inequality.”

Escondida, majority owned by the world’s largest mining company BHP (ASX, NYSE: BHP), produced 1,242,687 tonnes of copper last year, a 34% increase over 2017, when it was hit by a 44-day strike. That became the longest private-sector mining strike in the South American country’s history.