Global Copper supply is being impacted by numerous factors from environmental occurrences to economic and political circumstances. Global floods have created a possibly serious complication for the Copper industry in Western Europe and China. Last month, Europe’s largest Copper producer experienced extensive floods that had caused large amounts of damage, production to stop, and increased production lead times. Flooding also hit Henan province in China, which is a major Copper production hub and home to several large businesses which are said to be struggling with the aftermath of the floods. Reports have claimed that the floods have damaged railways which are used for the delivery of goods and raw materials and the water has damaged industrial areas, having a large impact on facilities, machinery, and warehouses.
Another factor impacting the global Copper supply could be caused by the Chilean workers within the world’s largest Copper mine currently voting for a strike. This new revelation piles pressure on an already recovering Copper market after the disruption caused during the impact of the COVID-19 pandemic on the global economy. BHP Group’s Escondida mine in Chile is where a large percentage of the world’s supply of Copper is produced for use in the global manufacturing sector. Union leaders representing workers at the La Escondida mine have allegedly accused the company of attempting to bribe staff with one-time bonuses in exchange for unrealistic labour hours, however BHP claim it will include improved conditions and new benefits. The unions have chosen to act and pressure BHP into better terms with 99.5% of 2,175 members of the main union voting to strike, however, this is yet to be completed due to the laws set in Chile.
As tensions are rising in Chile the nation may experience a change in laws and government. The nation has drafted a new constitution that may lead to tougher rules on water, glaciers, metals, minerals, and community rights with presidential elections in November. As labour tensions intensify, trillions of dollars in government incentives fuel demand for industrial metals, highlighting the need to ensure workers are satisfied with mining terms. This should provide a wake-up call for BHP to reach satisfactory agreements if they want to avoid a lengthy conflict that could be the costliest in the country’s union history.
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