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LATIN AMERICA: Mining an Open Pit of Disputes

Diego Cevallos* - Tierramérica

MEXICO CITY, Sep 9 2006 (IPS) - With skyrocketing metal prices, revenues are flowing in some Latin American countries, but labour conflicts have intensified apace in the mining sector, where workplace dangers are shared by some of the region’s best paid miners and by several million poor.

Chilean miners, who earn up to 2,000 dollars a month, and miners in Peru and Mexico, whose paychecks may be no more than 60 dollars a week, are demanding their share in the bonanza.

In Chile, a three-week strike in August hit the world’s largest copper deposit, and in Peru, neighbourhood protests paralysed Latin America’s biggest gold mine for several days last month.

Meanwhile, in Mexico a labour dispute between miners and the government continues after five months, and in Central America activists and residents want to block mining sector development.

According to the International Labor Organisation (ILO), mining produces the most fatal accidents and illnesses among its labour force. Furthermore, millions of people work in mining informally, without employment or health protections.

Mining generates problems, like “cancer, pollution in the rivers, and [spontaneous] abortions,” says Honduran Catholic bishop Luis Alfonso Santos, who is active in the civil society movement against the aggressive Central American opening to transnational mining companies.

The recovery of metal prices over the past two eyars – thanks to high demand in China and India – pulled Latin American mining out of the crisis it suffered in the 1990s, when unions’ power in the sector shrank and a large portion of the workforce underwent liberalisation.

But now the inflow of millions of dollars in fresh revenues has sparked problems between the mining executives and the workers and nearby residents, in some cases erupting into violent clashes.

The challenge is how to ensure that all sides “reconcile the era of hardship when it turns into an era of plenty,” given that price booms are cyclical and could be reversed in four years, Eduardo Chaparro, a mining expert with the Economic Commission for Latin America and the Caribbean (a United Nations regional agency), said in a Tierramérica interview.

Miguel Palacín, president of the national association of Peruvian communities affected by mining, told Tierramérica that with its multi-millions in revenues, “the mining executives have put the government on its knees.”

“It is a shame that the authorities accept the alms of the multinational corporations, when, according to the laws, the mining resources belong to the state,” he said.

Palacín was referring to the agreement that the Alan García government signed in August with the mining companies, stating that over the next five years the firms will “voluntarily” contribute 757 million dollars to Peru’s social programmes.

That figure represents 27.4 percent of the net profits taken in so far in 2006 by the five biggest foreign mining companies operating in Peru.

Since 2004, all of the mining companies in Latin America have seen strong profits. Copper prices jumped 111 percent, gold 42.5 percent and silver 65.5 percent.

To ensure that the firms contribute to local development, residents of the northwestern Peruvian region of Cajamarca paralysed operations at the Yanacocha mine, Latin America’s leading gold producer, from Aug. 28 to 31.

Run by the U.S.-based Newmont and Peru’s Buenaventura, the mine is located in an area where 74.2 percent of the population lives in poverty.

“Mining is done by taking lives, destroying biodiversity and causing poverty. This has to stop,” declared Palacín.

According to the activist, the mining industry does not even generate a significant numbers of jobs in this country of 28 million people. The mines in Peru employ 70,000 people, of which 60,000 work in precarious conditions because they do not belong to unions, he said.

In Chile, around 2,000 workers at Escondida, the world’s largest copper deposit, staged a three-week strike demanding pay raises. The conflict was resolved Aug. 31 with an agreement to increase wages by five percent.

Most Chilean miners are unionised. But that is not the case in other countries, like Peru or in Central America, where most work independently or are subcontracted employees.

And the regional trend, including Chile, “is an increase in non-unionised workers, because the mining companies use subcontracted workers as part of their cost controls, avoiding the financial burden of providing benefits,” explained ECLAC expert Chaparro..

Chile’s government-owned National Copper Corporation, Codelco, has three subcontracted employees for every union employee, while in the private sector at least half of the workers are subcontracted, Moisés Labraña, head of the Chilean Mining Confederation, which includes 6,500 mining workers, told Tierramérica.

In Mexico, after the death of 65 workers at a coal mine in April, it was found that most of them were not on the payroll or members of the national union. They were paid about 60 dollars a week for their work in dangerous digs.

After the accident, a labour conflict erupted, and continues today. The Vicente Fox government does not officially recognise the national union’s leadership, backed by most of the workers, but instead works with another.

Some observers believe that behind this dispute – which left two workers dead – there are negotiations and company and worker interests for adjusting salaries and improving work conditions.

Mining in Mexico, which employs 257,000 people directly, grew more than seven percent annually in 2004 and 2005, the fastest rate since 1995.

It is a recovery similar to what is happening in the rest of Latin America, but is reflected only slightly in small- and medium-scale mining, where social and environmental problems persist, says Chaparro.

More than nine million people in Latin America make their living from artisanal mining, including children and women. It is the most vulnerable sector in terms of the precariousness of the work and the lack of benefits.

Worldwide, some 43 million people work in mining, and it is the industry with highest work-related mortality, according to the ILO.

(*Diego Cevallos is an IPS correspondent. With reporting by Daniela Estrada in Chile. Originally published Sep. 2 by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme.)