Miners’s bonds show increases of 34% and Codelco has the greatest advances
As commented in the industry, high amounts are not in line with cost reduction plans that are implementing many companies due to a more complex scenario for the sector.
The costs of mining in recent years have gone up, and an important part of the improvement is due to labor costs. In the last collective bargaining between workers and the management of some of the major mining companies of the country, the average amount awarded in respect of bonds and interest free loans to employees by 34% from the immediately previous agreements increased.
The figure is an average of bonds and loans granted between 2012 and 2013 to direct employees in certain divisions of companies such as Codelco, Collahuasi, Escondida and Anglo American.
Considering the amount of recent agreements between unions and companies, there were increases in bonus payments ranging between 9 and 72% in relation to the amounts agreed in past negotiations.
The division that recorded the highest increase is Chuquicamata, belonging to Codelco. In the process agreed in late 2012 a bond loan totaling $ 19.8 million per employee, significantly higher than the amount recorded in the process of 2010, for $ 11.5 million was agreed. According to 2012 figures from the Mining Council, that site totaled 6,767 own employees.
Then Chief Executive Thomas Keller, justified the amount by the need to establish a voluntary retirement scheme of two thousand people for the operation of the underground mine, which is currently under development and is one of the main feasible structural projects of the copper company.
Another division that also saw large increases in their bond and loan was Collahuasi, up 36%. So, last year it paid $ 19 million, while in the last negotiation had agreed to $ 14 million. According to what the company explained at the time, the figure was because the process took a year in advance and in the midst of a restructuring of the company.
The mining company who has given bonds and loans by the largest amount is Escondida, owned by BHP Billiton, which in 2013 agreed with their workers a payment of $ 23 million, the highest recorded so far. This payment amounted to a staff of about four thousand company employees, according to figures available from the Mining Council. Per worker, Escondida disbursed 31% more than in its previous 2009 bargaining, that percentage was below the increase of Chuqui.
Anglo American Sur, which considers the division of Los Bronces, Soldado and Chagres paid a total of $ 15.7 million in its last collective bargaining, which meant an increase of 31% over the last agreement between management and the unions where they agreed to $ 12 million.
A division that exhibited a smaller increase to the above is El Teniente, from Codelco. With 5,079 direct employees to 2012 in the last collective bargaining as of February this year the unions agreed to a bonus and loan for $ 16.8 million, while in 2011 had received $ 15.3 million.
As commented in the industry, this level amounts are not in line with cost reduction plans that are implementing many companies due to a more complex scenario for the sector. They also warned that the delivery of such amounts of money could be unsustainable, considering the low price of minerals. This year recorded an average copper price of $ 3.15 versus a value of US $ 3.60 per pound throughout 2012.
$ 3.12 per pound of copper is the average price Cochilco estimated for this year. A higher value than projected at the beginning of the exercise, but still lower than in previous years. This could complicate the mining companies by rising costs faced.
Source: El Mercurio
