Chile looks to redistribute copper profits
The mining sector is Chile is facing changes as President Michelle Bachelet is boosting union power to help redistribute the copper riches that have made Chile the wealthiest country in Latin America. Mining companies say the move risks further investment delays in an industry already reeling from higher costs and lower prices.
Seeking to redress the balance of industrial relations power three decades after Augusto Pinochet introduced a new labor code, Bachelet presented a bill that would make union leaders the sole authorized negotiators in wage bargaining and outlaw a company’s right to replace striking workers, Bloomberg reported.
The labor proposals, along with raising corporate taxes to fund free education, are part of a campaign to narrow the worst income inequality among the 34 members of the Organization for Economic Co-operation and Development. Business leaders say the measures undermine an economic model of low spending and taxes, limited regulations and high saving rates that have helped propel growth. Miners are particularly concerned as copper reaches the lowest in more than four years.
More than half of a $110 billion pipeline of copper and gold mines have been postponed or scrapped because of the commodity slump and higher costs in Chile, which provides a third of the world’s copper, according to the country’s mining association, known as Sonami.
Anglo American Plc and Glencore Plc have delayed a $1 billion expansion at their Collahuasi copper venture, Teck Resources Ltd. held back its Quebrada Blanca expansion on lower copper prices and Antofagasta Plc (ANTO) has said it will sit out the slowdown in commodities demand before embarking on an expansion to its flagship Los Pelambres mine.