RENO–(Mineweb.net)As a strike loomed at Chile’s Escondida mine and a cave-in slashed production at Codelco’s massive Chuquicamata mine, and miners rioted at the Chambishi Mine in Zambia, copper prices for already tight copper supplies are climbing.
Reuters quoted union Secretary Pedro Marin that the union has been notified that Escondida has asked for government mediation. A government representative will join BHP Billiton at the negotiating table Monday in an effort to avert a strike by 2,000 employees at Escondida scheduled to begin August 7. Marin told Reuters “this man (the government representative) will have a huge responsibility in his hands.
Late Friday, Escondida workers voted to strike after they have already reduced output at the mine to force management to raise its contract offer. The current contract expires on August 2. Marin claims that Escondida is already producing 40% less copper because of the slowdown. BHP officials say the slowdown has not impacted hurt production because the company is using stockpiled inventories and processing higher-grade material. Escondida produced 8.5% of the copper mined globally in 2005.
Workers are asking for a 13% raise and a $30,000 net bonus per employee. BHP has offered a 1.5% raise, a bonus, and low interest loans of $8,500 per employee.
Meanwhile, six workers were shot last week, allegedly by mine personnel in Zambia, during a protest at the Chambishi mine, which lost two days worth of output or 250 metric tons. Mine operator China Nonferrous Metal Mining produces 25,000 to 30,000 tonnes of copper annually from the operation.
A recent rockslide took its toll on copper output at the Chuquicamata Mine, which is part of Codelco’s Norte Division. The cave-in measured 46 meters long by 22 meters wide and 26 meters high, according to Codelco news releases. Thankfully, no workers were injured during the slide which impacts the transfer area of the M-1 Primary Crusher system. Codelco said the slide affected the north wall of the transfer area as well as conveyor belt systems, which cut off two-thirds of the ore flow to the mill.
Codelco estimated the daily production loss at 1,000 tonnes of fine copper and 40 tonnes of molybdenum. In the meantime, Codelco intends to meet its sale commitments by processing stockpiled concentrates and anodes. Chile’s Finance Minister Andres Velaso told a Santiago news program that repairs at the copper mine will likely be completed in a month.
U.S. copper miner Phelps Dodge Senior Vice President Art Miele recently warned that, “because the copper pipeline is so stressed” trying to keep up with consumer demand, “even modest production shortfalls will have an immediate and significant impact on the market balance.”
Miele warned that “with production facilities operating at or near capacity, it is not possible for mines or smelters to make up for lost production” to withstand strikes and other disruptions to copper supplies.
Copper futures rose early Monday morning by 4% on the Shanghai Futures Exchange. Copper for October delivery soared as high as US$8,486 per tonne, according to Bloomberg. Meanwhile, copper prices already have hit as high $3/lb.
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