UNION STRIKE THREATENS PRODUCTION AT MAJOR COPPER MINE

Why in the news?

The world’s largest copper mine faces disruption as the union demands a bigger share of profits, potentially impacting global copper prices and industry operations if negotiations fail.

source:worldmap

Union Actions and History

  • A powerful workers’ union at BHP’s Escondida mine, which produced nearly 5% of global copper in 2023, initiated a strike on Tuesday, aiming to disrupt production.
  • The union has previously paralyzed the mine, notably in 2017, leading to a spike in global copper prices. The company declared “force majeure” during past strikes in 2006, 2011, and 2017.
  • Escondida’s union, Sindicato Nro. 1, represents around 2,400 members, approximately 61% of the workforce, including 98% of frontline workers. The union’s significant membership and financial reserves give it substantial bargaining power.

Analysts’ Perspectives

  • Analysts note that while the union is relatively small compared to others, its control over Escondida—a critical copper production site—enhances its influence.
  • A smaller strike at Lundin’s Caserones mine, involving only 30% of the workforce, is less likely to impact production. Analysts are monitoring the situation closely for potential price changes depending on the strike’s progression.
About Copper Mining:

Copper Characteristics:

  • Chemical element with a reddish-brown colour.
  • Excellent conductor of electricity and heat.

Copper Ore Sources:

  • Common minerals: Chalcopyrite, bornite, chalcocite, malachite.
  • Found in various ores within the Earth’s crust.

Mining Methods:

Open-Pit Mining:

  • Used for shallow deposits.
  • Involves large pits; 80% of global copper mining.

Underground Mining:

  • For deeper deposits.
  • Involves shafts or tunnels.

Top Producers:

  • Chile: 27% of global production.
  • Peru: 10% of global production.

Applications:

  • Electrical conductors (wiring, components).
  • Piping and tubing (plumbing).
  • Alloys (brass, bronze).
  • Electronics (circuit boards).
  • Roofing and architecture (corrosion resistance).

Copper Mining in India:

Production Statistics:

  • 127 copper mines in India (out of 700 global).
  • Major producers: Madhya Pradesh (53%), Rajasthan (43%), Jharkhand (4%).
  • India has low-grade ore (less than 1% metal content).

Current Developments:

  • The Indian Ministry of Mines proposed a delegation to Zambia for copper exploration.
  • Zambia has 6% of world copper reserves; 8th largest producer in 2022.
  • Domestic demand for copper rose by 16% (FY2022-24), with clean energy demand growing by 32%.
  • India’s net imports of copper cathode increased by 180%.