Collective bargaining in mining: a barometer of the country:
Beyond their intrinsic importance, in terms of agreeing on working conditions, bonuses, salary adjustments and benefits for those involved, collective bargaining in mining has a national importance: they have an eventual effect on the price of copper in the international market and are followed by all related sectors, from retail trade to large construction companies. The expectation that these processes arouse at local and global level in the media is an indication of the great relevance of these processes.
This importance is evident when analyzing the results of collective bargaining from a historical perspective, showing a direct correlation between the price cycle of the red metal and the political, economic and social situation of the country.
In 2011, when the "peak" of the commodity super cycle was being experienced, high amounts of bonuses per term of negotiation (BTN) were observed, while in 2016, with the sharp drop in the price of copper, BTNs suffered a significant downward adjustment. As shown in the third study of Collective Bargaining, prepared by Vantaz Group, in 2021, the recovery of the economy and the higher copper price resulted in a rise in BTNs of 18% compared to the average observed in 2020.
Strikes, on the other hand, were also higher than the previous year, with 5 cases of strike, where the Caserones Union (Lumina Copper) stands out, where after 26 days of strike, an amount for BTN of $19 million was reached, in addition to benefits and a salary readjustment of 2.5% for its workers.
Strikes are feared for several reasons, clearly the most important being the stoppage of activity and its impact on production, but also because of the negative impact on relations between companies, workers and the mining ecosystem.
Traditionally, the vast majority of collective bargaining is regulated, i.e., according to calendar. However, 2020 was the exception, with a higher participation of early negotiations, given the context of the pandemic. In 2021, with a more controlled pandemic situation, the trend where regulated negotiations are the common factor was observed again.
What will challenging 2022 look like?
We believe that the trend towards regulated negotiations will continue, in a favorable scenario of copper prices, and in a local context of rising costs due to inflation. We believe that the current year will be complex from a political and social perspective.
In conjunctural terms, although the composition of the government and its cabinet is already known, there is uncertainty regarding the evolution of other issues that are critical for mining.
However, it is to be hoped that the negotiations will seek mutual benefit from both parties, with a long-term view, beyond the contingencies of the moment.
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