Codelco reaches contract agreement with project unit employees
The new 36-month agreement with the workers from company's projects unit affects some 620 employees.
Antamina mine.
Talks aimed at preventing a November 10 strike at Peru’s Antamina, the country’s largest copper mine, broke down this week after unionized workers and management were unable to reach an agreement on a promised bonus.
Antamina labour union (SUTRACOMASA) secretary general Jorge Juarez told Reuters the miners are demanding a bonus to offset shrinking proceeds from the company’s profit-sharing agreement. However, management has cited low copper production and falling global prices as the reason for failing to deliver on the bonus agreement.
The most-traded January copper contract settled at 46,810 yuan ($7,620) per tonne, up 230 yuan from the last session. But market sentiment is cautious as most investors are waiting for the result of Thursday’s European Central Bank’s policy meeting, analysts agree.
Source: Kitco.com
News of the launch of a new state grid project in China and news of the impending strike in Peru lent some support to the complex trading in Shanghai.
“While not totally unexpected, (the strike) does help to provide some additional support to the market,” said Standard Bank in a research note.
BHP Billiton (ASX:BHP) and Glencore (LON:GLEN)each have 33.75% stakes in Antamina, which has a 370,000 tons per year production capacity. Teck Resources (NYSE:TCK) holds a 22.5% stake in the mine and Mitsubishi Corporation has10%.
Copper production at Antamina mine has fallen by 16% this year compared to same period in 2013.
Comments
Wilfredo Pescador
Please note that the highlighted quote in this article is incorrect. The union is not demanding a bonus ‘according to’ the profit sharing agreement, but they are seeking a new bonus to supplement the income from the profit sharing agreement now that profit is decreasing.
Antamina complies with the Peruvian law to pay out 8% of (adjusted) earnings to the workers on top of base compensation and company bonuses, as agreed by the union in the collective bargaining agreement. This so-called ‘workers’ participation’ has been a very substantial part of compensation in the past decade. Now that profits are decreasing due to lower prices and lower production, the union attempts to convince Antamina to replace the workers’ participation by a company bonus in order to keep total compensation stable.