The year kicked off with a two-day strike at the world's second largest copper mine, state-run Codelco's Chuquicamata in northern Chile, in what has become yet another recent example of the growing power of mining unions in the nation, the world's largest red metal producer.
Also this week, Xstrata put an end to a strike that started in late December at its Altonorte copper and molybdenum smelter in northern Chile.
Along with a 42-day work stoppage at BHP Billiton's Spence mine that started in October, that makes three strikes at major operations in Chile's copper industry last year.
Therefore when contract renewal season comes around in roughly three more years, the likelihood of more stoppages is considerably high.
In the case of Chuquicamata, workers were demanding roughly the same bonus (about US$25,000) paid by BHP Billiton to employees at its 57.5%-owned Escondida mine in an amicable settlement last year, which set a new precedent for Chilean mining.
But since Chuquicamata is state-owned and its productivity per worker is considerably lower than that at Escondida, the world's largest copper mine, the Codelco strikers came in for some heavy criticism.
And as Codelco's profits go to Chile's treasury and Chuquicamata's workers already had far higher salaries than the average Chilean worker, especially state employees, their stoppage was not received well.
Even President Michelle Bachelet made a public statement disapproving of the strike.
Therefore the stoppage only lasted 48 hours, but workers still ended up with a 4% pay raise in addition to an inflation adjustment and a bonus of about US$24,000, not much less than the 5% raise and bonus granted at Escondida.
Spence's workers also tried to obtain the same benefits as Escondida in their strike but ultimately attained terms less favorable.
As for how much production was lost at Chuquicamata, to give an idea, in December the workers held an illegal 24-hour strike with no prior notice as a show of force. During that time the mine lost 1,820t of copper output.
Chuquicamata is part of the Codelco Norte branch, which produced 613,000t of copper in the first nine months of 2009 out of the company's total 1.21Mt. Codelco is the world's biggest copper miner.
Also this week in Mining:
Brazil
- Vale is in the process of deciding whether to restart its Vale Inco subsidiary's Voisey's Bay nickel mine in Canada or shut it down after several months of strikes.
- Magellan Minerals began a preliminary economic assessment (PEA) on its Coringa gold project.
Chile
- Goldcorp entered into a binding agreement with New Gold for the latter to exercise its right of first refusal on a 70% stake in the El Morro copper project held by Xstrata Copper, a branch of multinational group Xstrata, and then pass the share on to Goldcorp.
Goldcorp agreed to advance US$463mn to New Gold in order to acquire the stake once the right of first refusal is carried out. Goldcorp will then pay New Gold another US$50mn in cash upon acquiring its Chilean subsidiary, the holder of the El Morro stake.
New Gold already owns the remaining 30% of the project and intends to keep it following the transaction, according to Goldcorp.
The deal appears to be in conflict with Barrick Gold's agreement made in October to purchase the 70% from Xstrata for US$465mn in cash.
Located in Chile's northern region III, El Morro has 8.3Moz gold and 6.3Blb (2.86Mt) of copper in measured and indicated resources.
Colombia
- Coalcorp Mining agreed to sell its La Francia coal mine to a subsidiary of Goldman Sachs in a deal worth some US$200mn.
Ecuador
- Ecuador has created a national mining company, dubbed Enami EP, to manage this "strategic" sector.
Mexico
- Yale Resources acquired the Guadalupe gold-silver property in Zacatecas state some 4km north of Fresnillo city.
Guadalupe spans 283ha and contains two historic mines, Santa Rita and San Antonio. At present the property is host to a small-scale mining operation that processes ore at a rate of about 3-4t/d.
Nicaragua
- B2Gold poured the first gold-silver doré at its Orosi mine. Orosi is expected to produce 80,000-90,000oz/y gold with average cash costs of US$465/oz over its initial seven-year life.
Peru
- The board of copper-zinc producer Minera Antamina approved a US$1.29bn expansion project.
Output will grow by some 30% and the mine life is set to be extended six years to 2029, thanks to a 77% expansion of ore reserves to 745Mt completed in 2008.
Uruguay
- Uruguay Mineral Exploration closed its purchase of Fortune Valley Resources worth roughly US$7.5mn.
RESULTS & FIGURES
Gold Fields reduced by 2.8% its corporate-wide production guidance for the second quarter of its 2010 fiscal year ending December 31 to 900,000oz due to stoppages at its operations in South Africa as a result of seismic activity.
In Latin America, Gold Fields owns the Cerro Corona gold mine in Peru.
Alamos Gold produced 48,000oz of gold at its Mulatos mine in Mexico in the fourth quarter of 2009 at costs of US$335/oz, up from 39,347oz year-on-year. In all of 2009 the company exceeded its production forecast and put out 178,500oz at US$335/oz.
Peru's energy and mines ministry (MEM) approved 255 environmental studies for mining projects during 2009, more than in previous years.
Brazilian iron ore exports by volume reached 24.2Mt in December, up 10.4% compared to November and 76% higher than the 13.8Mt recorded in December 2008, the country's foreign trade ministry reported.
And finally back to Chile, which churned out 477,266t of copper in November, 8.2% more than in the same month of 2008, national statistics bureau INE reported.