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Chile Sees Unrest In Its Gold And Copper Sectors

Major issues are emerging in the world’s largest copper-producing nation this week.

In Chile a key union of copper miners has called a strike for today, signaling possible labor unrest brewing.

In a short press release yesterday, the Confederation of Copper Workers called for its members to stand down on March 22. With the group saying that action was in protest over moves by the Chilean government to limit the ability of unions to take actions such as strikes. Related: What Happens When Oil Hits $50?

That could signal an important battle brewing in mining labor here. With Chile’s government set to consider a controversial labor reform bill on Wednesday.

At the same time, Chile’s government itself also made a big move against mining last Friday. With national environmental regulator SMA saying it will seek to shut down one of the country’s largest gold mines.

That’s the Maricunga mine, operated by Kinross Gold. Where SMA ordered the company to stop withdrawing water from local wells that are used in feeding the operation. Related: Horizontal Land Rig Count Summary 18th March 2016

SMA cited environmental damage as the reason for the stoppage. With the regulator also saying that the mine will not be able to continue operating without water supply from the wells in question.

Kinross responded by saying that the environmental damage here has been caused by drought rather than mining activities. And the company noted that the SMA still must have the cease-pumping order approved by an environmental tribunal in Santiago before it goes into force. Related: Supply Outages in OPEC Countries Push Up Oil Prices

That decision looks like it could come quickly. With Kinross saying that the SMA is seeking an “expedited injunction” with the tribunal. Which could see the Maricunga operation shut down completely — idling some 250,000 ounces per year of gold output.

Whatever the outcome, the fact that regulators would go after a large operation like this in such a quick and unexpected fashion is a concern for miners in the country. Watch for a decision here, and more on labor reforms (and labor response to such) later this week.

Here’s to pressing issues,

Dave Forest

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