Copper supply risks ease as Chile miners do deals

Bloomberg News | August 26, 2024 | 

Workers at El Teniente. Image: Codelco

Chile’s copper-mining industry is emerging from an intense period of wage negotiations, signaling a diminished risk of further disruptions in a country that accounts for a quarter of supply.


Over the weekend, about 300 striking workers at a Lundin Mining Corp.-operated mine went back to work. A week earlier, the main union at the giant Escondida mine run by BHP Group ratified a labor pact following a three-day stoppage. Antofagasta Plc reached an early wage deal with the main union at its Centinela facility, completing the firm’s talks for the year.

To be sure, there are several contracts still pending — including at Codelco’s sprawling El Teniente mine — totaling about 752,000 metric tons of supply, according to data compiled by BTG Pactual. But that’s down from the 3.35 million tons at risk at the start of the year.

“Supply risk derived from strike action is receding as most 36-month collective labor agreements have been fulfilled,” BTG Pactual analyst Cesar Perez-Novoa said in a written response.

Companies are having to spend more to get contracts signed, although the pullback in copper prices from a record-high in May probably has helped convince workers to lock in deals. For the market, waning strike risk in Chile will help ease concerns over tightness in the supply of concentrate — the raw material used to feed smelters.

(By James Attwood)