Revista Nueva Minería

In his third time in the state mining company with the largest investment plan in history, the CEO of the corporation denies “congestion” in the company; he said to be feasible El Salvador with new projects and, if necessary, he will not shake his hand to reduce manning.

Nelson Pizarro Accountant (civil mining engineer, 73 years old, married, five children and 16 grandchildren) received eleven days ago the call of the Chairman of Codelco, Oscar Landerretche, announcing that the board of the state company in a unanimous vote had named him CEO of the National Copper Corporation.

The appointment puts him for the third time in Codelco: in the 90’s he was in Andina and Chuquicamata, and between 2003 and 2006, in Codelco Norte. Now he will have to face the complex moment of the company, which is making the biggest investments in its history, US $ 23,500 million, with late projects, high costs and lower worker productivity.

This month he will leave Lumina Copper, the Japanese capital mining company where he is CEO and he did in eight years Caserones project and he will resign as director of Antofagasta Minerals, a company from Luksic group. “We all understand that charges are incompatible” he says.

In his first interview after being appointed as CEO, Nelson Pizarro refers to the main issues to be addressed, in particular the degree of interference that workers should have about the decisions of the company and which in recent days has led to a fight correspondence between the current director of Codelco and workers’ representative, Raimundo Espinoza, and former board member Andres Tagle.

Do you think that workers have “taken” Codelco?

“No. Workers defend to the death their benefits package and the obligation of management is, in turn, to defend surplus Codelco has committed to the state”.

“Codelco definitely is not there to meet the needs of workers, and I personally do not believe that workers think only of that. The Chilean State intends, expects and demands that Codelco deliver returns that correspond”.

-When you have been in Codelco, have you feel that there is “congestion”?

-“Not, Congestion. What I see is that the employment relationship at Codelco is complex. “

-¿Less or more complex compared to private mining?

“In all, the employment relationship is getting complex. People are empowered. Today, workers are more aware of their rights and fight for them. In addition, the company changed, is very knowledgeable and requires knowledge. It is a different Chile, in any field. Look at the difficulties that today make a mining project. Communities expect that the benefits generated by mining on their ‘backyard’ are noticed in being and quality of life”.

-What so critical is the human factor in the profitability of projects of Codelco?

“I would say that the salary of workers (Codelco) is in market values of the Great Mining. I know many mines and levels of Codelco workers are not too different between each other”.

Is there Codelco giftedness with respect to the other major mining?

“I’m not able to answer that question categorically. The productivity of the Chilean mining in general have deteriorated, but not exclusively in Codelco. And there are several reasons for this: the falling ore grades, increasing transport distances, costs of critical inputs and productivity of labor, among others”.

“Edward Scissorhands” in the 90s: “Why should it be different today?”

-To You, at the 90’s, did not shake your hand if you had to cut staff and have been called “Edward Scissorhands”. And now at Chuqui you have to make a definition that does not like by unions. Will you do honor to the name? .

“Why should it be different today? Because I’m older? No, no. You have to have support of the board and face the conflict until you have that support. If you do not have the support of the case, you will have to make decisions”.

“For me it is very clear that the Chuqui opencast is in its final stages. The pit is already more than a thousand feet deep, and that, in itself, is a huge hurdle, meaning transport distances around 10 km and that makes it economically unfeasible in the short term. The only alternative is this plan so many years been studying, which is Chuqui Underground and I saw it when I was (in 2003 and 2006). We knew it was inevitable. “

“It’s yes or yes; no more life in the open. It cannot be extended five years or more that operation. “

-And Chuqui workers understand it ?

“The workers by the end of the day know perfectly well that the future is in the underground mine. This must be done as well. The profiles of workers in underground mine are different from workers from open pit operation. In the part of mine is where is going to be the biggest differences in the skills and competencies of required people. The process in the concentrator and in the foundry is the same.

-The Chuquicamata unions have benefits in many cases higher than in other divisions. Will you try to match them with the rest?

“That is a problem that needs to be addressed. Viability of Underground Chuqui depends on many indicators, on many critical inputs of many values, one of which is the one you are naming. Those values must be such as to enable the project’s profitability. “

The Hospital del Cobre (Copper’s Hospital), which is only for Chuqui workers is another front of conflict, in this case, with the community.

“I do not think that the Hospital del Cobre remain exclusive, it should be shared with the community to the extent that the benefits of Codelco’s workers are not affected. If there is excess capacity, rationality suggests that should be shared.

Why Codelco should have a hospital?

“It is already constructed. There are not enough hospitals to close one already done”.

‘The unions make pressure and seek political support for their positions, even looking at Codelco’s board. What will you do if this happens ? .

“That is bad, very bad. My experience in conflicts I faced in Chuquicamata is that I always cut them myself. That is a sine qua non condition. You go and show a trading limit in your directory, and with that negotiation limit you do the process and get to where you can go. They (the unions) always try to come (to Santiago, to the directory), but it should not be so. “

“I do not want to demonize the union leaders of Codelco. The Union leader validated in the election process by his constituents is a good management tool, because you have a partner who is representing the interest of many. There is nothing more terrible than face a conflict with workers without union leaders validated. “

-Would you leave if they take away the floor from you ?

“If they take away the floor from me, there is nothing more to say.”

“If unions do not do their part, there is no future in Codelco. Unions have to understand what the goals, plans are, the reason why of these goals and plans are, and what happens if they do not comply. Unions cannot waste the opportunity given by this government”.

“Capitalization is not a blank check, is associated with the achievement of goals. Note that this is the first time in history that the Government supports that way (Codelco). This is a backup to create the future”.

One day after being appointed in Codelco, the Government committed itself to capitalize on the mining with $ 4 billion. Was that a condition to take?

“Without resources, what will you do? It was an obvious condition to have enough resources to develop these projects, in view of the effects it would have on Codelco not develop”.

“Said that, I feel great that the Government has taken the decision to do so. But let me say it is not a blank check”.

“Resources are to the extent that goals are met associated therewith. And above all it is a powerful message that the State of Chile is backing the Codelco development plan”.

-¿Neither is a “blank check” for the workers?

“For no one. The goals must be followed. If not met, the government will have to make their decisions. I think the challenge for people who are taking this responsibility is to take the required precautions, necessary and do things with the utmost professionalism for what is sought, to enable the development of these structural plans “.

‘The El Salvador Division has the highest costs of Codelco. Is it viable?”

“What I’ve heard is that there is an interesting geological resource, called the Rajo Inca. I’ve heard figures of tonnage and heard laws that seem almost normal to good. And therefore, there is a possibility there that must be explored carefully to see whether the geological resource enables a new project. The whole road must be done, without running, because running encountered”.

“Cannot any of the structural projects be done, or you want to do them all?

“I do not know the details, but I saw that the Codelco’s development plans considered Nuevo Nivel Mina El Teniente, Andina expansion, and Chuqui Underground (exploiting sulphide) Radomiro Tomic projects, I do not know if Rajo Inca. These are essential projects that would not be made Codelco’s production in the medium term is impacted irreversibly”.

-And what about Andina, which has a complex environmental issue?

“The decision is to go ahead with that. I know there is a discussion of whether to do it in the form 244 or make it modular. Andina is a large site, it was during my time, it was clean in the sense that the mineral was not larger contaminants. And it is a resource that must be analyzed and see”.

-How long would you like to stay?

“When you accept a challenge of this magnitude, you have to stay until meeting the goals.”

-You mean, staying up until Chuqui Underground is ready ?

“But if Chuqui Underground will be in 2019 or 2020! No, I want to make the package assembly, structured construction, contracts awarded, what has to be done”.

-You want that Codelco belongs to the state or would like to enter private?

“I do not go into philosophy. Codelco has to be efficient and what is good for private in management, is equally good for Codelco. The challenges are different, in Codelco is much more difficult to manage because of the nature of Codelco itself. Chileans want Codelco to belong to the state, but efficient, and advanced technology. That is what Chileans want”.-

There must be “chemistry” between the board and the CEO.

The change in the Codelco’s law of corporate governance was to separate the company’s political cycle. How about what the last CEO change (Thomas Keller)?

“CEOs have to reflect the goals of a directory (Board). If there is no chemistry or there is no match between what a CEO thinks and what the Board wants, that does not work. Directories (Boards) are those that define policies, raise the strategic objectives”.

“The goals have to be agreed upon and approved by the board and management has to materialize, implement and report them to the directories. And if one does not give a proper account, the directory has to change”.

‘In Codelco, the directory changes just when the government changes. Do you think is right?.-

“That was a bad thing. When conceived (Corporate Governance Law), they should be taken into account, so that will just not occur and the CEO be changed every four years. It is a bad practice”.-

Source: El Mercurio