SANTIAGO, July 22 (Reuters) - World no. 1 copper miner Codelco said that a strike in Chile by contracted service workers could cost it $27 million a day, as the union told Reuters the stoppage would continue into a second day.
Contract workers affiliated with the Confederation of Copper Workers (CTC) went on strike on Tuesday to demand the right to negotiate a benefits package similar to that offered to the company’s direct employees.
The CTC, which represents contract workers that do everything from cleaning and driving to mining work, blocked roads and set up barricades at Codelco projects throughout Chile.
“The stoppage is continuing, the workers are blocking access to Codelco’s projects,” a spokesman for the CTC told Reuters on Wednesday.
Codelco did not immediately respond to a request for comment on Wednesday.
The strike comes at a difficult time for Chile’s mining companies, which are struggling with a weak copper price and water shortages following an eight-year drought.
At the same time, Codelco is undertaking an ambitious multi-billion dollar investment plan to revamp its aging mines and keep production flowing.
The last major round of contract negotiations and strikes in the global copper industry was in 2011, but a contentious round is expected at some mines this year as the falling copper price and deep cost cutting programs strain relations between workers and operators.
Although Codelco says benefits for contract workers are the responsibility of the companies that employ them, the contractors’ union does have a ‘framework agreement’ with Codelco.
The current framework agreement, agreed in 2013, and its benefits added up to the equivalent of some $120 million a year, said Codelco CEO Nelson Pizarro in a statement late Tuesday.
“An increase in these benefits and their associated costs are not compatible with the current conditions of the copper market, the economic reality of the country and project sustainability,” he said.
Accepting the demands of unions linked indirectly to Codelco would cost the company some $1 billion in the long term, the miner said.
Reporting by Fabian Cambero, Writing by Rosalba O'Brien, Editing by W Simon