Copper prices recovered on Wednesday as more than 700 workers began a strike at Antofagasta Plc’s (LON: ANTO) Centinela mine in Chile, adding another supply threat in the world’s largest copper-producing nation.
Benchmark three-month copper on the London Metal Exchange was down 0.1% at $14,405.50 per tonne by 0950 GMT. The metal has gained about 16% this year, with tight supply helping support prices despite Wednesday’s stronger dollar.
The walkout started at 8 a.m. local time after mediation overseen by Chile’s Labour Inspectorate failed to resolve the wage dispute, according to the Minera Esperanza and Distrito Centinela unions. The striking employees represent 22% of Centinela’s direct workforce and the stoppage will restrict operations, the unions said.
Antofagasta said it was “willing to continue discussions with their representatives in order to reach an agreement that takes into account the interests of both parties.”
The dispute adds to labour tensions across Chile’s copper industry as prices hover near record levels and miners contend with weather-related and operational setbacks. Supervisors at BHP’s (ASX, LON: BHP) Escondida, the world’s largest copper mine, are also in government-mediated talks aimed at averting a strike.
Pay divide
A key sticking point at Centinela is differences in pay and benefits among employees performing the same jobs but belonging to different unions. The unions said Antofagasta rejected a proposed mechanism to eliminate the disparities without offering an alternative.
The differences stem partly from changes to collective bargaining schedules. In 2017, the company negotiated in parallel with its three existing unions, producing agreements with largely equivalent terms. Since 2020, bargaining schedules have been separated, with negotiated increases taking effect at different times.
The stoppage is the first strike at Centinela, one of Antofagasta’s four mining operations in Chile, and only the second in the company’s history. Centinela produced 240,400 metric tons of copper last year.
A prolonged disruption could tighten an already constrained copper market, particularly if labour disputes spread or coincide with further operational problems at major Chilean mines.
Despite the walkout, Antofagasta said it does not expect the disruption to alter its production outlook.