SANTIAGO/LA SERENA, Dec 6 (Reuters) - Codelco is optimistic it can strike a deal with union leaders at its century-old Chuquicamata copper mine in northern Chile, it said this week as it embarked on complex contract negotiations.
The wage talks at Chuquicamata, one of the Chilean state-owned company’s largest operations, are seen as a bellwether for the industry and as a precursor of contract discussions due at the nation’s other copper mines in 2017, including at BHP Billiton’s Escondida, the world’s largest.
Chuquicamata’s collective contracts will expire in February, but talks have begun several weeks ahead to allow time to try to reach an agreement.
Conditions have changed significantly since the last talks in 2012, when copper prices on average were 40 percent higher and big bonus payouts were the norm. The two sides came to a swift agreement then.
“I‘m confident that with the understanding of union leaders over what the division is going through, we can make this negotiation successful,” Alvaro Aliaga, head of Codelco’s northern operations, said on Monday.
With discussions under way, union leaders declined to comment. But in October, ahead of the talks, bosses of the mine’s six different unions were divided as to whether it would be easy to arrive at a successful outcome.
Several said they were concerned, given the difficult economic backdrop, that the company would try to cut benefits awarded in previous negotiations.
“We’re going to obviously defend the benefits obtained up until now,” said union leader Daniel Diaz at a union meeting in the coastal city of La Serena.
Another potential hurdle could be union demands for job protection as Codelco transforms Chuquicamata from an open pit into an underground operation.
Codelco, which is already cutting costs to put its delicate finances in order, has indicated it would maintain its recent policy of zero raises and tighter bonuses.
But Aliaga said efforts to lower costs at Chuquicamata would not necessarily mean reduced benefits for workers.
“What really makes a difference are operational practices,” he said. “The big issues we need to agree on at Chuquicamata are how to do our jobs differently, be more productive and more efficient.”
Embarking on early negotiations could be a positive sign, said Juan Carlos Guajardo, executive director of Santiago-based mining consulting firm Plusmining.
“But that does not guarantee that the end result will be positive,” he added. (Reporting by Anthony Esposito, Editing by Rosalba O‘Brien; Editing by Lisa Von Ahn)