Copper Workers Federation: All governments have been in the trend of only taking the silver out of Codelco

The Federation of Copper Workers (FTC), representing 26 unions within state-owned copper company Codelco, has voiced concerns over the government's approach to managing the company’s operations, claiming that all administrations have focused solely on extracting silver from Codelco. The comments were made during a press briefing held on Wednesday morning, where the federation outlined its stance on recent discussions surrounding potential privatization of the state enterprise and the proposals it plans to submit to Codelco during August. According to Aldo Binimelliz, general secretary of the FTC, Codelco is often judged as a private company in some contexts but not in others. He highlighted that private companies typically invest between 30% and 40% of their surpluses into infrastructure improvements, automation, and operational efficiency. In contrast, Codelco allocates only 8% of its surplus to such investments. While acknowledging that Codelco faces structural challenges, Binimelliz emphasized that this does not equate to insolvency. Binimelliz cited specific examples of underinvestment, noting that while Minera Los Bronces replaced a crusher after a decade of operation, the Andean division continues to use the same equipment for 30 years. This disparity underscores the federation’s claim of inadequate reinvestment in critical infrastructure. In response to these claims, Codelco President Bernardo Fontaine stated that the company’s mining law is comparable to other mines, though private firms generate significantly higher margins. The FTC disputed this, asserting that the lower production levels are largely due to the legal framework governing Codelco. Binimelliz explained that compared to Escondida, which operates under a 1% royalty rate, Codelco must exert double the effort to achieve similar output, with an average royalty rate of just 0.4%. Meanwhile, the temporary suspension of operations at the Andes Norte project, which was halted as a precautionary measure against seismic risks, could last up to two years. Amador Pantoja, a leader of one of El Teniente’s unions, confirmed that the shutdown is expected to remain in place for at least two years based on ongoing studies. He added that the division manager assured union leaders that neither the Rol A nor Rol B employment categories would be affected, providing full job security for workers. Andes Norte is one of three key projects aimed at extending the life of the mine and maintaining annual production around 400,000 tons. It had been gradually reopened following a fatal accident last year that resulted in six deaths. The FTC proposed four main strategies to improve Codelco’s performance: reducing costs through adjustments to third-party service contracts, internalizing maintenance operations, implementing an economic policy that leverages the company’s revenue streams, and strengthening the business of smelting and refining. Binimelliz noted that 42% of Codelco’s expenses are attributed to third-party services, many of which are linked directly to production rather than long-term projects. He pointed out that US$3.6 billion is spent annually on external contractors, highlighting inefficiencies in current practices. A comparative graph presented by the federation showed that BHP maintains 91% of its critical maintenance workforce internally, while Antofagasta Minerals employs 50%, and Codelco relies on just 10%. With 3,400 in-house technicians versus 8,500 external contractors, the discrepancy highlights a major issue in how Codelco manages its operations.