Covid-19 crisis leads BHP to start reducing activities in Cerro Colorado and will offer retirement plan to its workers

Since the arrival of the Covid-19 in the country, the mining industry has looked for ways to continue operating and has been able to maintain – to date – productions similar to those of previous years. To this is added that international prices have improved compared to the peak of the crisis, which sets a positive scenario for the sector.

However, in recent weeks alerts in the sector have been triggered, especially since the number of infections in the northern regions, where important mining operations are concentrated – although more focused on the Antofagasta region – have had a significant rise. .

It is in this context that a resizing of BHP’s Cerro Colorado copper mine was announced this Wednesday. Specifically, it was reported that this operation will initiate a process aimed at “resizing” its activities at said site, located in the Tarapacá Region.

This will include significant reductions in mine movement and mineral processing for the remaining period of its current environmental license, which is valid until the end of 2023. The process was brought forward due to the Covid-19 crisis.

This was stated in a letter that BHP sent to the Cerro Colorado workers, where it was stated that “this is a difficult decision, but a necessary one. Although we all knew of the validity of the permit to the year 2023, the crisis generated by the current pandemic has forced us to anticipate the start of the de-escalation of the operation given the times of high uncertainty and volatility in the markets that Cerro Colorado will have to face in its last years of operation ”.

From the company, meanwhile, they regretted the consequences of the decision, but assured that it is necessary for Cerro Colorado to achieve and maintain a healthy financial situation in the remaining years of operation and thus avoid more drastic measures such as a suspension or a early closure.

One of the main effects of the measure is the decrease in the endowment in the operation of the mine.

When asked about the number of workers who will have to leave the site due to this decision, BHP pointed out that to date the exact number of dismissals that are going to occur has not yet been settled. Currently the site has 1,094 workers.

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“To date, we do not have an accurate number of the separations, as we are making all possible mitigation efforts, contemplating internalization of tasks now outsourced, as well as opportunities to apply for recruitment processes from other BHP mining operations. The complete process of adjusting the endowment this year will take the order of four months, ”reported the mining company.

However, the company stated that it will continue to explore medium and long-term alternatives that will allow it to extend its mining operation beyond the year 2023. These projects are currently being worked on, which include replacing the use of high Andean water by seawater.

In addition, in the statement sent to the workers, they were informed that they will develop instances of dialogue with them in order to explain the measure in greater depth.

Faced with the increase in infections in Antofagasta and Calama, Escondida and Spence have reinforced their contingency plans to protect the health of their own workers and contractors.

Last Monday – June 22 – operations totaled a total of 209 confirmed cases of Covid-19, between own workers and contractors, of which 76 corresponded to active cases. Escondida registers 150 confirmed cases, 45 of them active, while Spence, including the SGO project (concentrator for Spence), registers 59 confirmed cases, 33 of them active.

Both operations have implemented contingency plans that together add up to more than 100 prevention measures in the areas of health, social distance, hygiene and sanitation, transportation logistics and reinforcement of measures on the ground. These measures are under permanent review and in line with that established by the authority.

Although it is a large-scale mining operation, which once exceeded 100,000 tons of copper produced, Cerro Colorado in recent years had been declining its production rate to levels of around 70,000 tons of copper. In 2019, according to figures from the Chilean Copper Commission (Cochilco), it reached 71,700 tons, which represented 1.2% of the country’s copper production.

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