Codelco offers early negotiations for Chuquicamata

Chilean state copper producer Codelco has offered Chuquicamata unions 1, 2, 3 and union 1 of Antofagasta early contract negotiations instead of the talks originally scheduled for April, when the current collective contract expires.

"We have acknowledged reception [of the proposal] and the union leadership is doing the correspondent analyses with its legal teams to make a final response to this proposal," the unions stated in a release.

This week the unions will call for a general assembly in order to discuss this subject, the press release added.

One of the topics included in the company's proposal is an improvement in health coverage, where Codelco seeks to take charge of the management of workers' health plans.

In December, Chuquicamata's unions 1, 2 and 3 rejected an offer made by the company to manage a life insurance policy and increase death coverage, involving savings of 820mn pesos (US$1.2mn) annually for around 4,500 workers, according to local newspaper Pulso.

At present, administration of insurance is the responsibility of the unions and it is paid 50-50 by workers and the company. The existence of an intermediary company that administers the insurance has led to cost overruns, meaning the value of the policy is more than double current market prices, according to a source cited by Pulso.

Chuquicamata's collective contract negotiations are expected to be complicated, taking into account the differences that exist between the unions and the company in the context of the conversion from open-pit to underground mining at the site.

In December, the union blocked entrance to the mine for a day, pointing to differences regarding the transformation of the mine and irregularities at the Salvador Allende copper hospital.

In the last negotiations in 2016, which ended up with no strikes, the end-of-conflict bonus awarded by the company was 4.4mn pesos (US$6,390 at the time) per worker without any salary readjustment. This deal was reached against the backdrop of tight margins in the mining industry, with average copper prices at around US$2.2/lb, while Commerzbank forecasts that prices will average US$2.99/lb in 2019.