Chile Copper Strike Highlights Volatility of Green Economy

Workers for CODELCO, Chile’s state-run mining company and the largest copper producer in the world, launched a nationwide strike on Wednesday to protest plans to shut down a foundry employing 350 people.

While the strike ended on Thursday, it threatened to cost CODELCO $20 million a day and highlighted the volatility of the copper industry, which is vital to electric vehicle manufacture and thus a staple of a “green economy” promoted by leftist and communist governments including that of China, which is the number one importer of Chilean copper.

“Police said they arrested 18 people as striking workers, waving Chilean flags and setting tires on fire, blocked entry to six mining facilities around the country. They did this mainly at the Ventanas foundry, which the government announced last week that it would shut down,” Agence France-Presse (AFP) reported on June 23.

“Union leaders said the strike had paralyzed Codelco altogether but [Chile] Finance Minister Mario Marcel said it had ‘altered’ production but not shut it down,” AFP relayed.

The Federation of Copper Workers (FTC), an umbrella group of CODELCO’s union, predicted that the strike would cost CODELCO $20 million a day. The Chilean state-run mining company produces roughly eight percent of the world’s copper supply, a figure amounting to between 10 and 15 percent of Chile’s GDP.

The FTC initially said the strike would last indefinitely, though it ended after just 24 hours on June 24 shortly after CODELCO’s union reached an agreement with the company’s owners.

“Thursday’s agreement does not include more investment in the troubled Ventanas smelter [poised to shut down], but it involved strengthening the Ventanas copper refinery,” FTC President Amador Pantoja told reporters without elaborating.

CODELCO Interim Chief Executive Andre Sougarret told reporters on June 23 that the company plans to launch a working dialogue with laborers at the Ventana foundry starting on June 27 regarding the plant’s eventual closure.

“We’re with the workers; we plan on meeting their demands,” Sougarret said, adding that “retraining, relocation and exit packages were on the table for workers currently employed at the smelter.”

“Closing the smelter will take years, according to Sougarret and the process is reliant on Congress modifying a law that forces the company to use the Ventanas smelter, which could take months,” Reuters noted on Thursday.

Chile is the number one producer of copper globally. The South American nation’s government signed a free trade agreement with China’s government that went into effect in 2006 and paved the way for Beijing to become the top importer of Chilean copper.

“China is the main buyer of Chilean copper and the top client for Codelco, which has a key office in Shanghai,” Reuters reported in July 2021.

Metals used heavily in the production of electric vehicles, including copper and lithium, accounted for nearly 84 percent of Chilean exports to China last year.