Codelco CEO: Chuqui Underground needs major revamp

"Chuquicamata Underground does not have merit. Its construction isn't justifiable if we are not capable of doing a profound transformation of its concentrator, smelting and refining units".

Those were the words of Codelco CEO Nelson Pizarro in a presentation at CRU's World Copper Conference in Santiago, Chile. The project involves switching the more than a century-old open pit mine in northern Antofagasta region to an underground operation.

Pizarro said that the Chilean state copper giant would have to revise the original project to find optimization opportunities and make profound design modifications that would contain rising costs.

Codelco introduced modifications to the Chuquicamata Underground project last November. The US$1.4bn project was approved by environmental agency SEA but has faced much criticism and protests by workers, many of whom have lost their jobs.

Pizarro told reporters at the event that Chuquicamata Underground's revamp was "necessary, indispensable and cannot be avoided."

"It does indeed affect workers. There are a lot of workers who have to be relocated and many more who will have to end their working life. We have been working towards this for a year-and-a-half," said the CEO.

The redesign of the refinery unit involves laying off 72 workers, or 19% of the total, who must be relocated or be dismissed. In March, refinery unions protested the decision.

UNION ACCEPTS CONTRACT OFFER

Meanwhile, Codelco reached a collective contract agreement with the professionals' union at Chuquicamata.

Some 82% of union members accepted the proposal of the company, Codelco said in a press release.

The workers will receive an end-of-conflict bonus of 7.3mn pesos (US$12,147) and a salary readjustment of 1%.

The Chuquicamata division produced 331,000t of fine copper in 2017.