Chile’s miners walk out to demand respect and stop privatization

Miners in Chile returned to work on Tuesday after a 24-hour strike that shut down production at mines owned by Codelco, the government-owned mining company. Workers were protesting the arrogance of the current management that workers say has not honored collective bargaining agreements and has not listened to workers as it forges ahead with its plan to reshape the company. Workers are worried that management’s transformation plan includes eventually privatizing the company.

“This is a work stoppage that will serve as a warning to the government if it decides to privatize the mines,” said Raimundo Espinoza,  president of the Federation of Copper Workers (FTC by its Spanish acronym). Workers were also protesting proposed cuts to their health care and Codelco’s plan to eliminate 2,600 jobs.

Revenue from Codelco provides 40 percent of the government’s annual revenue, much of which goes to provide health care, education, and other government services.

Chile’s President Sebastian Pinera promised during his election campaign in 2010 to sell off part of Codelco, but he now says that the company’s transformation plan does not include privatizing it. However, steps taken by Codelco’s new management appointed by Pinera have raised concerns that the eventual goal is to privatize the company.

For one thing, the mineral rights at the company’s Gabriela Mistral mine have already been privatized, and the mine has become a limited company. “They have changed the legal status of our mine, but they don’t say so,” said Emilio Paez, union leader at the Gabriela Mistral mine. “We are now another company, but they (the government and Codelco management) have said nothing.”

The union is also concerned that Codelco is taking on too much debt to finance its transformation plan, which is estimated to cost $17.3 billion. A heavy debt burden could leave the company at the mercy of bond traders and lay the foundation for a future sell off of the company.

Prior to Pinera’s administration, the government had begun to privatize some of the ancillary features of the copper industry and undertaken joint ventures with companies from China and other countries.

Much of the work done now in copper mines is performed by contractors, whose workers are not unionized and do not receive wages and benefits comparable to that of the unionized miners.

In May, a strike by  contractor workers at Codelco’s El Teniente mine about 50 miles south of Chile’s capital Santiago shut down the mine. Workers were demanding that their bosses pay them wages and benefits equal to the unionized miners. The strike, while violent at times, fizzled after workers started returning to work after about three weeks.

Union leaders said that Monday’s 24-hour work stoppage, which included union miners and contract workers, was a huge success that put the company on noticed that it cannot ignore workers while making management decisions that affect workers’ livelihoods.

Union leaders said that the strike was observed by 100 percent of the workers at the eight mines targeted by the union. “The support for this strike has been amazing,” said Juan Meneses, union leader at the El Teniente mine. “This is the biggest strike in years.”

The worldwide financial press worried about the effect that this strike and any subsequent strikes might have on the copper market, and union leaders were quick to pick up on the significance of the shutdown. “This was a successful strike, and now it is clear how much we are worth,” said Hernan Garrido, a union leader at El Teniente. “Now the administration must look at us differently because otherwise this is the beginning of more strikes.”

Before the inauguration of Pinera, Codelco management sought the input of unions when making decisions. Union members even served on the board of directors. But Pinera appointed a new Codelco CEO, Diego Hernandez, who ignored the union and its members when drawing up his transformation plan.

When the strikers returned to work, the government said that it would open a dialogue with the unions in hopes of preventing future strikes.

The unions chose July 11 as the day for their walkout because it marked the 40th anniversary of the nationalization of Codelco by then President Salvador Allende. Allende was overthrown by the dictator Augusto Pinochet, who then tried to privatize as much of the economy as he could, but Codelco was such a success as a publicly owned company that he was unable to do so.

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