Copper prices climbed Thursday as a strike by more than 700 workers at Antofagasta’s (LSE: ANTO) Centinela mine in Chile raised concerns about production disruptions that could become more serious next month.
Benchmark three-month copper on the London Metal Exchange rose 1% to $14,614.50 per tonne in early trading local time, after touching $14,646.50, its highest in nearly two weeks. Expectations of renewed Chinese buying following a week-long holiday also supported prices.
The strike, which began Wednesday, has disrupted mining, haulage and mine development activities, although processing plants can continue operating in the near term, BMO Capital Markets said in a note Thursday. The impact on copper production could become more visible from November if the stoppage continues.
Antofagasta said it remains willing to negotiate with the unions and doesn’t expect the disruption to change its production outlook. The mine produced 240,400 tonnes of copper last year, according to the company’s annual results.s
Shares in the company fell 0.8% to £36.64 in London on Thursday morning, extending Wednesday’s 3.6% decline. The company has a market value of about £36.1 billion (US$47.7 billion).
Supply pressure
The walkout began at 8 a.m. local time Wednesday after government-mediated negotiations failed to resolve a wage dispute involving the Minera Esperanza and Distrito Centinela unions.
The two unions represent 709 employees, or 22% of Centinela’s direct workforce. Their members rejected the company’s latest offer, which included a 2% increase in base wages above inflation, a one-time payment of 22.5 million Chilean pesos and a low-interest loan of 3.5 million pesos, along with improved benefits.
The dispute adds to labour tensions across Chile’s copper industry as prices hover near record levels and miners contend with weather-related and operational setbacks. Supervisors at BHP’s (ASX, LSE: BHP) Escondida, the world’s largest copper mine, are also in government-mediated talks aimed at averting a strike.
Copper’s gains Thursday also reflected expectations that Chinese buyers would rebuild inventories after the National Day holiday, according to CRU Group principal analyst Craig Lang. Low inventories and mounting risks to mine supply have increased concerns about the availability of metal.
Pay divide
A central issue at Centinela is the difference in pay and benefits among employees doing similar work but represented by different unions. The unions say the company rejected a proposal to eliminate those disparities without offering an alternative.
The differences stem partly from changes to collective bargaining schedules. In 2017, Antofagasta negotiated in parallel with its three existing unions, producing agreements with largely equivalent terms.
Since 2020, negotiations have taken place at different times, with wage increases and benefits taking effect on separate schedules. Antofagasta said the disparities reflect the evolution of negotiated agreements rather than a policy of unequal treatment.
The stoppage is the first strike at Centinela, one of Antofagasta’s four mining operations in Chile, and only the second in the company’s history.
Centinela, about 1,350 km north of Santiago, produces copper concentrate and cathodes, along with gold, silver and molybdenum. Last year’s copper output rose 7% from 2024, according to Antofagasta.
Although the company has maintained its production outlook, a prolonged strike could threaten ore supplies to its processing plants and add to concerns about copper availability in an already tight market.
