World top copper miner to cut 3,000 jobs
Chile’s Codelco, the world’s No.1 copper producer, will offer up to 15 percent of its workforce retirement in a bid to shed as many as 3,000 jobs by the year-end to boost efficiency, new CEO Diego Hernandez said in a newspaper interview published on Saturday.Codelco [CODEL.UL] is restructuring its staff and management to help increase productivity and enable it to better compete with leaner private sector rivals.While seen unlikely for now, any labor action could hurt supply of the red metal."We have a special situation compared to our mining competition," Hernandez told newspaper La Tercera, saying the average age of the company’s staff was 48. He added that 21 percent of the workforce is either on sick leave or chronically ill."That clearly affects productivity ... That means Codelco can’t definitely count on a fifth of its workforce," he added. "We are talking about offering (retirement) to 10-15 percent of Codelco’s workforce."Despite using state help to increase waning output, while other miners cut production during the global economic downturn, Codelco is challenged with cutting costs.Industry experts often compare Codelco’s productivity to that of Escondida, the world’s biggest copper mine operated by BHP Billiton (BHP.AX)(BLT.L) and Rio Tinto (RIO.L)(RIO.AX), which out-produces Codelco’s giant Chuquicamata mine with fewer than half the workers.Some of Codelco’s workers are already past retirement age, and Hernandez wants to implement generational change in the workforce.Hernandez said he wasn’t personally in favor of retirement plans, that said the restructuring needed to be done in the next 3-4 months."We can’t wait, we don’t have time," he said. "They should be finished by Dec.31, and during that time we will also make new hires. So the workforce will fall, but we don’t know by how much."Hernandez has reorganized the company’s mining divisions and scrapped two vice-presidencies in a bid to boost efficiency.The company’s Federation of Copper Workers stopped short of threatening protests following the management restructuring, but called on its 15,000 members to be on a "state of alert for any calls from our organization to defend our rights."The federation says the new divisions could take away resources from aging units, which could trigger layoffs and hamper operations.Unions have also threatened to take action if President Sebastian Pinera moves on campaign pledges to sell part of the company. Pinera, a billionaire businessman, has since scrapped plans to allow private investors into the company.Hernandez added Codelco had no plans to liquidate futures contract hedges given current high copper prices.