Andina on strike

Vancouver – The supply of copper concentrates on the world’s market got a little bit tighter after workers walked out on Corporacion Nacional del Cobre de Chile‘s (Codelco) Andina mine in Chile.

Union workers at the state-owned operation went on strike Dec. 6 after rejecting Codelco’s final wage offer. The company has offered a wage adjustment for inflation, but unions demanded a 5% real wage increase above that. Some 900 union workers at the mine, or about 85% of the mine’s employees, voted to reject the offer.

Codelco’s last strike came in 2001 at its Radomiro Tomic mine in northern Chile. That protest lasted a week before workers abandoned their demands for a better wage offer. In 1996, workers walked out at the company’s Salvador mine but the strike ended after 24 hours.

Codelco is also in the midst of contract negotiations at its Chuquicamata operation, the world’s second-largest copper mine. Wage negotiations at the company’s mines are staggered, which prevents labor disputes from halting the company’s overall production.

The last strike at a Chilean mine came in August at BHP Billiton‘s (BHP-N) Escondida copper mine but ended the same day it began.

Andina produced 176,643 tonnes of Codelco’s overall output of 1.12 million tonnes in the first nine months of the year.

The Asian copper smelters are expected to feel the impact and add fuel to attempts by miners to reduce 2004 treatment and refining charges, the fees paid by miners to smelters for processing the raw material into copper.

In late Oct., the copper concentrate market was dealt a blow when a slippage accident at the Grasberg copper-gold mine in Indonesia has caused the deaths of eight workers.

The incident saw 2.5 million tonnes of rock and debris fall from the high wall into the huge open pit, burying trucks and mining equipment along with the workers.

In the aftermath, owner Freeport-McMoRan Copper & Gold (FCX-N) revised its fourth-quarter sales estimates to 200 million lbs. copper and 250,000 oz. gold, a reduction of close to 10%. A small portion of the operation has been closed since the slippage, limiting supply to a number of Asian smelters.