No end in sight for Cerro Verde strike as talks fail

Freeport-McMoRan's Peruvian copper mine Cerro Verde, where a two week strike has curtailed operations, failed to reach a labor agreement with workers Thursday, a union official said.

The 1,300 miners – who walked out on March 10 – complied with the law by returning to work briefly on March 24 after the labor ministry declared the strike illegal, and then immediately began another strike, union official César Fernández told BNamericas.

The union is demanding a greater share of profits, safer working conditions and improved health benefits, Fernández said in a telephone interview. Cerro Verde, Peru's largest copper mine, has been operating at 50% of capacity after hiring extra personnel in addition to its 300 non-union workers, he said. Workers last staged a strike at the mine in 2011.

Freeport's Sociedad Minera Cerro Verde (SMCV) unit confirmed the renewed stoppage in a corporate filing to securities regulator SMV.

"Cerro Verde continues holding constructive talks with the union and company workers to address their concerns within the framework of the existing collective bargaining agreement," SMCV said in the statement. "Cerro Verde's production levels have not suffered a material impact due to the strike, and we urge all our workers to return to work."

Peru-based miners including Milpo, Buenaventura, El Brocal, Simsa, Minera Raura and Shougang Hierro Perú have all staged strikes over the past 18 months. Peru is the world's second largest copper and silver producer.

The stoppage adds to a halt of operations at Freeport's Grasberg mine in Indonesia due to a government ban on exports, while Peru's Volcan this week also declared force majeure on its copper, zinc and lead shipments after flooding damaged the central Andean railway. Workers this week ended a 43 day strike at BHP Billiton's Escondida mine in Chile.

The 360,000t/d Cerro Verde mine, close to Arequipa in southern Peru, where Freeport completed a US$4.6bn expansion at the end of 2015, produced 1.1Blb copper and 9,580t molybdenum in 2016, according to the energy and mines ministry (MEM). The mine mainly exports to Asian smelters, with a smaller proportion of sales going to North America, Europe and South America.

Cerro Verde boosted its annual profit tenfold to US$341mn last year compared with a US$33.3mn profit in 2016, as sales more than doubled to US$2.384bn from US$1.116bn in 2015.

The mine, which also produces silver, is owned by Freeport (53.56%), Sumitomo (21%), Buenaventura (19.58%) and other minority shareholders (5.86%).