February 17, 2017 / 12:45 PM / a year ago

Chile store owners lament end of miners' bonus culture

ANTOFAGASTA, Chile, Feb 17 (Reuters) - In the dusty mining city of Antofagasta in northern Chile, the copper miners are not the only ones lamenting the end of the commodities boom - and the juicy bonuses that went with it.

Businesses in Antofagasta - from retailers of cars and luxury cruises to taxis and restaurants - formerly enjoyed windfalls every time miners renegotiated their contracts, which in Chile typically means a one-off bonus for each worker.

In 2013, workers at BHP Billiton’s Escondida, the world’s biggest copper mine, each received a payment worth $49,000 at the then-exchange rate, the highest ever paid in Chile.

Competing for their custom, local shopkeepers put out signs saying “Take it now and pay when you get your bonus”.

Four years later contracts are being renegotiated, but the signs are gone. Although copper prices have recovered somewhat in recent months, they are still down some 30 percent from 2013, and last year saw a wave of job losses and output cuts across the industry.

This time, BHP has offered Escondida workers just $12,000, one of the factors that has led angry workers to go on strike.

Other mining firms are offering even less, creating a ripple effect through the city of some 400,000 people. The economy of Chile as a whole has continued to grow, albeit weakly, through the commodities slump, but Antofagasta has been in a deep recession.

“During the bonus boom there were times when we had safe boxes full of cash...now we see ever fewer people buying,” said Jonathan Rios, who manages local car retailer Automotriz Miranda.

The company has run no marketing campaign to attract Escondida bonuses this year, he said.

At a travel agency downtown, employee Patricia, who did not wish to give her surname, said that while miners still made up much of the company’s clientele, they were trading down.

“In the past, they asked for exotic multi-week Caribbean cruises, but now they opt for nearer, less luxurious destinations,” she said.

Local inhabitants said there had been a notable decline in miners flush with cash - and the advertisements that sought to part them from it.

“You can see it’s gone everywhere, all that money that they spent all over the city,” said taxi driver Erwin Medina.

“Lots of people benefited from that - restaurants, shops, and ourselves.” (Reporting by Fabian Cambero, Writing by Rosalba O’Brien; Editing by Chizu Nomiyama)

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