Copper rout collides with bonus bonanza to snarl labour talks
Copper prices are tumbling just as miners in the top producing nation gird to fight for bigger bonuses, setting the stage for labor strife that raises the risk of supply disruptions.
Workers at several mines in Chile are being emboldened by surging company profits and a bumper bonus package agreed to last week at the giant Escondida operation. But the market for bonuses is also linked to the price of copper, which on Thursday fell back below $9 000/t and is now about 15% off May’s record high.
The opposing factors create a tough environment for labour talks in a country that accounts for more than a quarter of global output and has a history of stoppages.
Mines that could be affected include Codelco’s El Teniente, El Salvador and Hales mines, as well as BHP Group’s Cerro Colorado and KGHM Polska Miedz's Sierra Gorda.
Worries over global growth amid the pandemic resurgence and reduced stimulus may signal an end to -- or at least a pause in -- record earnings for copper producers. Those factors may be of little interest to workers looking to cash in on copper’s rally from earlier this year and be rewarded for sacrifices made to keep mines running through the pandemic.
As the union representing striking workers at the Caserones mine told management on Wednesday: “We call on you not to delay too long, as the ‘market’ for signing bonuses is on the rise.”
Copper futures fell 1.6% to $8 894 Thursday.
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