Brazil & Southern Cone - March 2013 (ISSN 1741-4431)

President Sebastián Piñera is not just facing the prospect of renewed unrest in the education sector. In what spells further bad news for his government ahead of the November general elections, on 15 March Chile’s umbrella Federación de Trabajadores del Cobre (FTC), which groups 22 unions at the state-owned copper mining firm, Codelco, announced a national 24 hour strike “within 30 days” in protest at the “overbearing, arrogant and inefficient” attitude of Codelco’s management towards its staff.

The FTC’s announcement was made following a four-day extraordinary summit. In a statement, the FTC cited as cause for complaint the use of temporary contractors, which account for 45,000 of Codelco’s total estimated 60,000 work force, according to Raimundo Espinoza, the FTC’s head. Union leaders grumble that the increasing use of contractors makes it harder to implement certain labour guarantees, as provided by a 2008 framework agreement struck between Codelco and the FTC to end previous labour unrest. Other causes for complaint include Codelco’s failure to develop the potential of its mines, amid evidence of deteriorating ore grades, and alleged efforts to privatise health and pensions services.

If the FTC makes good on its threat, the 24-hour national strike would be the second since both Piñera took office in 2010 and the country returned to democracy in 1990. The previous strike, which was staged in July 2011 amid suspicions that the government was seeking to indebt Codelco in order to justify a future privatisation, cost US$14m in lost production [RBS-11-07]. According to Chile’s copper mining commission, Cochilco, Codelco accounted for 1.6m tonnes (t) of the 5.4mt of fine copper produced in 2012. This was down from 1.7mt produced in 2011 - a decline attributed to deteriorating ore grades. Meanwhile copper exports accounted for US$29.5m or 52% of Chile’s total exports in 2012, down from 54% in 2011 and 56% in 2010. According to Cochilco, copper accounted for 13.5% of GDP in 2012, down from 15% in 2011 and 16% in 2010.

Worryingly for the government, the FTC shows every sign of backing up its words with action. As well as a one-day national strike, the union also threatened industrial action at different locations over several days – and these actions are already underway. On 16 March, some 300 workers belonging to the Muellaje SVTI union held a five-day strike at the port of Angamos, Antofagasta, which has delayed the company’s weekly shipments. The unrest attracted media attention after clashes between the protesters and Carabineros resulted in 14 arrests and obliged a union leader, Enrique Solar Lagos, to seek emergency medical attention. The repressive response by the security forces has set off alarm bells, given the prospect of further unrest.

Codelco unveils investment plan

The FTC’s threat of unrest came days after Codelco’s executive president, Thomas Keller, presented a US$5bn investment plan for 2013, up from the US$4.1bn assigned for 2012. This is part of the company’s overall US$27bn investment plan for 2012-2016.

Of the US$5bn, US$2.9bn will go on major projects. These include the US$2.3bn Ministro Hales mine, which will receive US$1.1bn. Located in the Calama commune, Antofagasta, the mine is scheduled to come on line at the end of this year and will produce 183,000t of fine copper by end 2014.

Other big projects include a new mining level at the El Teniente mine, located in the Machalí commune, in the VI Libertador Bernardo O’Higgins region, which is due for completion by 2017. The US$3.7bn project, which will receive US$716m this year, aims to eventually expand the mine’s production from the current 137,000t per day (tpd) to 180,000 tpd after 2020.

• Polls

The threat of unrest comes as the latest poll by Adimark, published on 5 March, gave President Piñera a 38% approval rating, up from 32% in September 2012. This was his highest rating since May 2011, when it was 36%. The improvement was attributed in part to his handling of Chile’s ongoing border disputes with Peru and Bolivia. Foreign policy was ranked his best area of government and Foreign Minister Alfredo Morena the most popular minister, with 75% approval. Education Minister Harald Beyer was the least popular minister, with 31% approval. The poll surveyed 1,421 people nationwide between 4-28 February with a 2.6% error margin.