SANTIAGO (Commodity Online): The biggest churning in copper market will be seen in the coming days as employees at Chile's biggest copper mine of Codelco, owned by the government, went on a strike this week.
The Chuquicamata mine in northern Chile is one of the world's largest open-pit operations and it produces about half of Codelco's output. Codelco as a whole produces about 4 per cent of the world's copper. With production in Chile's main mine hit by the strike, copper market is all set to hot up in the coming days.
According to media reports, over 2,800 workers did not come for work on Monday as the strike began. The company had offered workers a salary increase of 3.8 per cent and individual bonuses of $23,000, noting that the official inflation index rose by less than 1 per cent over the past year.
Labour leaders said living costs are higher in the region of the mine and they have been seeking a 7.5 per cent pay hike and a $28,000 bonus to match pay for workers at the private Escondida mine owned by the Anglo-Australian consortium BHP Billiton Ltd. Codelco says that mine produces more than Chuquicamata with fewer workers.
Codelco is the Chilean state owned copper mining company formed in 1976 from the foreign owned copper companies that were nationalised in 1971. The headquarters is in Santiago and the seven-man board of directors is appointed by the President of the republic.
It was the largest copper producing company in the world and produced 1.66 million tonnes of the metal in 2007, 11% of the world total. It owns the world's largest known copper reserves and resources. At the end of 2007 it had a total of reserves and resources of 118 million tonnes of copper in its mining plan, sufficient to ensure more than 70 years of operations at current production levels.
Codelco's principal product is cathode copper. It is one of the world's foremost molybdenum producers and produced 27,857 fine metric tons in 2007 and is a large producer of rhenium, of which Chile is the world's largest producer .