World's Biggest Copper Producer Crippled by Strike

Costing Codelco $10 million per day

Chilean state-run mining group Codelco, the biggest copper producer in the world, was struggling on April 22 with a strike that has halved its output and is costing it $10 million a day.

The company said three operations in Chile -- the Salvador, Andina and El Teniente mines -- were off-line because of the stoppage. The strike, by contract workers demanding that an agreement for better pay and conditions be respected, has sent copper prices soaring on international markets.

On the London Metals Exchange, copper was trading for $8,655 dollars per ton, three percent above the average for the month and more than 20% over the 2007 average. On New York's Nymex, the metal moved nearly four dollars higher per pound over the day. The dollar's new record low against the euro on April 22 also contributed.

Codelco chief executive Jose Pablo Arellano said the stoppage was hurting the company. "I have called for a stop to these sorts of actions that cause damage, cause losses and some losses that will be irreversible," he said.

The Salvador and Andina mines account for a quarter of Codelco's production, while El Teniente, north of Santiago and the biggest underground mine in the world, accounts for another quarter. The company last year produced 1.58 million tones of copper -- 11% of total world copper output.

The contract workers launched their campaign five weeks ago, but the strike really started to bite early last week. Last year, an extended stoppage forced concessions from the company.

Copyright Agence France-Presse, 2008

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish