SANTIAGO – Dec 22 (Reuters) – Mining firms in Chile, the world’s top copper producer, say the government has left them in the dark over a new labor bill to be delivered to Congress this month, undermining the confidence of investors grappling with low metal prices.
President Michelle Bachelet’s socialist government says it wants to modernize collective contract negotiations and strengthen unions, though it has been vague on details. Senators close to the government have said it could seek to limit mining companies’ ability to replace workers during strikes.
The labor reform is part of a battery of measures aimed at reducing Chile’s gaping wealth gap, and Bachelet faces a tricky balancing act as mining accounts for half of Chile’s exports.
Mining companies fret the reforms will jack up labor costs and increase the power of unions in a country where strikes are relatively uncommon.
“It’s not the moment to implement a radical labor reform because we have had too many changes and each change creates uncertainty,” said Diego Hernandez, president of Antofagasta Minerals.
State-run Codelco and private firms like BHP Billiton, Anglo American, Glencore, and Antofagasta are all juggling weak copper prices, due to slacker demand from China, and surging costs.
The government has said reforms will be implemented gradually and industry’s concerns will be fairly evaluated. Still, executives and industry groups are concerned.
Alberto Salas, head of the influential SONAMI mining association, said it wants to know details of the proposals “so we can contribute to the debate and have a decent law.”
Investment in Chile’s mining industry is declining, dragging down economic growth to a projected five-year low of 1.7 percent in 2014.
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