As Chile gets convulsed by the aggravating effects of the Covid-19 pandemic, the structural brutality of copper mining is being starkly outlined. At Codelco or the National Copper Corporation of Chile, approximately 3,000 workers have been infected with Coronavirus and El Teniente and Chuquicamata are the hardest hit regions with 1,044 and 636 cases, respectively. In June itself, unionized workers had reported the suspect deaths of 3 workers and had demanded a proper investigation. Codelco peacefully airbrushed these cases by saying that the workers contracted the virus from an outside area. Chile ´s Federation of Copper Workers (FTC), in response to the sheer carelessness and profit-mindedness of Codelco, stated that "It is unacceptable that Codelco's senior management tries to evade its legal responsibilities to protect " the health and safety of its workers,".
Despite repeated warnings and censure by copper workers, the Chilean state continued to steamroller the country into sustained productivity and in fact, copper output has increased during the pandemic. As per the Chilean Copper Commission, Codelco "saw production rise 2.8% year-on-year in April to 133 300 t and 3.8% in the first four months of 2020, while BHPÂ ´s Escondida, the world's largest mine, pumped out 102 600 t, a rise of 11.4% on the same month the previous year, an increase of 9% so far in 2020." The Collahuasi mine, operated by Anglo American and Glencore, "produced 54 100 t, a 45.8% year-on-year rise, and was up 22.6% in 2020." The Chilean state's grisly genuflection to the hallowed principles of "profit-first policy" was neatly aligned with the aim of the mining sector as defined by the Mining Ministry and InvestChile, a governmental "Chilean Investment Promotion Agency" advising the government on free market reforms: "to encourage overseas companies to explore our country,".
The dystopian picture of Chile's copper mining sector is more clearly crystallized by InvestChile which defines itself as "responsible for promoting Chile in the global market as a destination for foreign direct investment, serving as a bridge between the interests of overseas investors and the business opportunities the country offers". Chillingly and austerely proclaiming its primary objective, InvestChile further seeks to "implement all types of initiatives whose purpose is to publicize, promote, coordinate and implement actions that seek to foster the entry of foreign direct investment (FDI) into Chile." InvestChile works with another consultancy firm named Kura Minerals which has a similar brutal blueprint of achieving a frictionless and class conflict-free mining environment. Kura Minerals was created to remove a perceived "market asymmetry" afflicting Chile. According to Kura Minerals, "This asymmetry is mainly derived from barriers to entry in terms of access to geological and legal information on areas of interest, availability of projects or areas to acquire mining rights, and legislative, political, and administrative difficulties facing foreign companies that wish to launch a venture in Chile." Correspondingly, the simple solution is to disembowel, disrupt and strangulate local opposition to mega-mining through subtle political technologies and juridical sleights of hand.
Mounting Covid-19 cases don't seem to deter Chile's ruling oligarchy from varnishing the economy to attract FDIs and already plans are being made to re-open the economy. Copper mining is also a part of these relentless efforts to "re-lubricate" the economy and "the mining sector continues to ramp-up previously suspended operations". The Social Green Regionalist Federation (FREVS), a political party in Chile, has demanded that "for the next two weeks at least, all activities in large public and private mining companies be suspended. The business logic of maintaining operations at any cost is irresponsible and short-sighted,". Sebastian Pinera, the president of the country, is not interested in this socialist baloney and has instead, opted to ruthlessly ram through the Covid-19 pandemic.
As a natural result of suppression-saturated copper mining policies and a cruel profit-over-people paradigm, workers at Antofagasta Minerals's Zaldivar copper mine voted to stage a strike on July 15, 2020. The union of Zaldivar copper workers has said that "If the company does not recognize our contribution and sacrifice, it will face an extensive strike that will completely stop production." Similarly, workers at Antofagasta's Centinela copper mine have also voted to strike after rejecting a pay offer by the company. The intensification of class struggle by Zaldivar and Centinela copper mine workers is quite predictable because the company operating there, Antofagasta PLC, has a long history of ferocious exploitation. Listed as the biggest company on the London Stock Exchange, Antofagasta PLC is notorious for its Los Pelambres copper mine in northern Chile where El Mauro dam, the largest tailing dam in Latin America, is situated.
It is widely noted that tailing "dams frequently fail, releasing enormous quantities of tailings into river catchments. These accidents pose a serious threat to animal and human health and are of concern for extractive industries and the wider community." The environmental impacts of tailing dam failures include contamination of water, soils and sediment. All this occurs on an environmentally enormous scale and "The sheer magnitude and often toxic nature of the material held within tailings dams means that their failure, and the ensuing discharge into river systems, will invariably affect water and sediment quality, and aquatic and human life for potentially hundreds of km downstream". Apart from the normal risks associated with tailing dams, the El Mauro dam is extra-dangerous because it "is constructed on the same tectonic plate as the biggest earthquake ever recorded in 1960, which measured 9.5 Richter. If the dam collapses the community will have 5 - 10 minutes to escape. Because of its size it is likely to generate its own earthquakes, due to a phenomenon called induced seismicity. This occurs when a dam or reservoir reaches a certain size where it begins to generate its own tremors."
Construction of El Mauro dam has included the death of at least three employees due to work accidents and according to a report produced by the London Mining Network, the excesses of Antofagasta PLC have not gone unchallenged. In October 2010, 11 residents from Los Caimanes went on a hunger strike for 81 days to protest against the highly unsustainable El Mauro dam and in July 2013, the Chilean Supreme Court ruled the dam as a "danger to human life". In spite of the unrelenting efforts of local communities, no substantial action has been taken till this day to completely close down the El Mauro dam. Now, it has been 12 consecutive years that the inhabitants of Caimanes have been trying to prevent their region from being devastated by the dam of a murderous mining company.
Considering the fact that Antofagasta mining company has been inter-wreathed in a web of long-drawn-out conflicts, it is not surprising that workers in Antofagasta-operated copper mines are agitating. The politico-economic potency of these strikes is indicated by the instant increase in the prices of copper to 2 year-high. The aforementioned increase in copper prices demonstrates that despite a supposedly complete hegemony of capital, there are factors which are strengthening the power of labor. To understand these factors, we need to look at the different ways in which the neoliberal globalization and imperialist integration of Chile into the institutional arrangements of capitalism is significantly impacting the economic-political directionalities of domestic copper production.
With the re-arrangement of Chile's copper production as one among the many links in a global commodity chain, two contradictory processes have been unleashed: firstly, the socio-economic oppression of copper workers through subcontracting and the construction of a reserve army of labor; secondly, a process of political potentiation wherein copper workers have gained the economic ability to inflict greater damage upon global capitalist markets.
Through the globalization of capital accumulation, extractivism too has got economically enmeshed in the interlocking blocks of different sectors. In the age of global capitalism, extractivism "embraces (and occurs through) considerable parts of food processing, finance, industrial production, trade and service provision." The economic entangling of extractivism has been majorly propelled by the financialization of capital accumulation which has restructured behavior of mining corporations. Mining is a deeply capital-intensive venture and extraction "tends to be costly and technologically complex, not least because accompanying infrastructure often has to be built from scratch to make deposits accessible. New projects typically require large upfront fixed costs subject to long payback periods, exposed to high commodity price risk". Between the mid 1960s and late 1980s, debt financing was a prominent modality through which the costs of high risk mineral exploration and heavy infrastructure were met. With the installment of neoliberalism as a Social Structure of Accumulation (SSA) in the 1990s, mining companies changed their mode of financing from debt financing to equity financing. This was the financialization of mining companies which drove "firms to maximize returns on equity and distribute value to shareholders."
Contrary to mainstream understanding of financialization engendering a shift away from production, mining companies have expanded production and increased the number of projects to consolidate dividend appreciation. This has happened because "Stock valuations approximate the expected production throughout a firm's lifetime, which is in turn coterminous with the mine life of its projects and operating mines." Consequently, stockholder value could be increased through the continuation or indeed, the "sustained expansion" of mining projects which "could bring in higher cash flows, margins, and returns." The imperatives of market capitalization and shareholder value maximization manifested themselves in off-shoring and the creation of exploitative "labor-value commodity chains".
Off-shoring or low-cost country sourcing helped in the reduction of unit labor costs through the hyper-exploitation of the impoverished workers of Global South. By 2000, mining investment in North America and Australasia had declined by half to 25% of worldwide flows, an indication of the fact that extractive capital was moving to the Global South in search for cheaper labor. As said by Intan Suwandi, John Bellamy Foster and R. Jamil Jonna, in the Global South "the reserve army of labor is larger, unit labor costs are lower, and rates of exploitation are thus correspondingly higher." All this helps in increasing the profit margin of mining companies and in enabling "them to secure additional strategic assets including technology, human resources, forms of production organization, intellectual property and marketing and design, which form barriers to entry for competitor firms." At the end, all this helps in enlarging the revenue base of mining companies, thus allowing them to increase the payout ratio, measured as the ratio of dividends to net corporate profits.
In Chile, the exploitation of copper workers by foreign corporations is visible through labor subcontracting and the bludgeoning informalization of the workforce which is taking place. From 24,000 workers in 1989, the number of workers directly employed by Codelco decreased to 17,936 in 2006. There was a contemporaneous rise in the number of contract workers in the same period from 1,371 to approximately 30,000. The breakneck speed of labor subcontracting is indicated by the fact that in a short span of 10 years from 1990 to 2000, subcontracted mineworkers increased from 6% of the labor force to more than 60%. More tellingly, it is estimated that over 80,000 workers in the Chilean copper mining sector, representing two-thirds of the entire labor force, are subcontracted by private companies. Chile also has a large reserve army of labor due to the fact that extractive capital "is characterized by a high organic composition of capital and a very low propensity to use labour in the production process, with the result that labour in the extractive sector is apportioned a very low share of the social product." In Chile, labor receives only 6% of the world market value of exported minerals, an indication of the high organic composition of Chilean mining capital.
There is a direct correlation between a high organic composition of capital and a large reserve army of labor and as noted by Paul Sweezy, "the increasing use of machinery, which in itself means a higher organic composition of capital, sets free workers and thus creates "relative overpopulation" or the reserve army." It is important to remember that the dualisation which a reserve army of labor creates in the form of stable employment vs. precarious employment is not present in a clear-cut form in Chile. Workers with permanent work contracts "do not necessarily experience greater job security than workers with contracts of limited duration. Twenty per cent of all indefinite contracts are less than one year old while 44.6 per cent are less than three years old, indicating significant employment turnover among workers with permanent contracts". The "relative dualisation" of the Chilean workforce suggests that copper capitalism in Chile seeks to provide only "minimal stability" to formally employed workers. This helps in the efficient utilization of the wage pressure caused by the reserve army of labor wherein capitalists try to maintain the distinction between formal and informal employment using minimal investment.
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