Mining productivity falls by 46% in 10 years
Mining is one of the main production areas of Chile, with exports of U.S. $ 44,294 million in 2013, but their levels of labor productivity show a sharp drop in the last decade, affected by lower ore grades and higher cost energy.
According to “A look at the productivity of the mining sector in Chile,” study prepared by the Chilean Copper Commission (Cochilco) between 2003 and 2012 labor-measure productivity as value added in mining per hour worked, declined 46% . The lower ore grades and rising costs, especially energy, explain much of the decline.
The influence of lower grade ore-geological-factor would explain 26% of lost productivity, while correcting by the energy consumption, the decline is 27% since 2012.
“The study measures the productivity of the mining sector and separated into two types of factors: those controlled by companies and those who cannot control and that basically correspond to geological factor. Due to the aging of the mines, it is increasingly difficult to produce a ton of fine copper, it is necessary to treat more ore, which in turn is harder. This requires a lot of energy. Therefore, this measure is used in addition to ore grades, “says Maria Cristina Betancourt, Cochilco’s director of studies.
Using the methodology of Total Factor Productivity (TFP), which considers capital and labor, among others, the study found that labor productivity was 39% lower in 2012 compared to 2003, while the remaining percentage corresponds to lower efficiencies in the production process.
Source: La Tercera
