Copper Production Buckles from a Handful of Chilean Workers

The Conjuring of Rent

Since the dawn of humanity, mining has been a fundamental part of every economy of every society. The metals extracted from the earth have defined eras of human development. Even today, some five millennia after the end of the Copper Age, this precious metal remains a vital force, powering our electrical connections and forming components in almost all electronic devices. Yet there are certain aspects of modern mining operations that the capitalist mode of production has subsumed. Everything that is extracted from the bowels of the earth or that grows from it, also thanks to agricultural activities, on the surface of our planet, intertwines with what our movement has termed the “conjuring of rent.” This “sorcery” that is consummated in the capitalist market allows those who control these particular productions to also take possession of shares of surplus value that are produced by other sectors of the economy. In fact, the market price of agricultural or mining products is not linked to the amount of labour required to produce them, but to the production costs that weigh on the less fertile soils or mines that are less rich in minerals and metals intended for sale. This can be explained by the fact that, just as the population’s need for food, the need for metal for industry and for the development of infrastructure, determine a demand that the bourgeois economists call “inelastic.” This can be satisfied by exploiting the less fertile land or mines where productivity is fairly low. Thus, the market price of certain products will be determined by the least fertile soil or the least mineral-rich mines. The production of these things must also be exploited in such a way that the overall supply of food or raw material is not less than the demand. For if the market price of a particular metal or food product were lower, the least fertile farmland or the mine least rich in metal would immediately be put out of the market and the overall demand for foodstuffs or metals and other raw materials will no longer be satisfied.

It is no coincidence that even the great capitalist powers wage wars, often through proxy mercenaries, when it comes to seizing underground resources. A particular case is the now decades-long war that is desecrating the Kivu region in the Democratic Republic of Congo, where the main prize is coltan, a tantalum-rich mineral essential for producing hardware for computers and cell phones. These exported conflicts arise as the mines and land acquired multiply the capital invested in them to an extent that industry cannot offer under any circumstances. As Marxist theory explained more than 160 years ago, the rate of profit of these primary sectors of the economy has a tendency to fall. However, the rapacious international bourgeoisies, perturbed to invest when faced with the prospect of a meagre return, swarm like locusts whenever they catch a glimpse of the mirage of doubling or tripling the profit on invested capital. Yet inherent in the very process of capitalist accumulation lies its own undoing: the capitalists’ profits are never fully secure from the indocility of their enemy class—the proletariat.

BHP in Chile

The Escondida mine in northern Chile is the largest in the world. About 400,000 tons of copper ore is extracted from it per day, which accounts for about 5% of the global production of that metal. But there’s another world record linked to this mine: the BHP Group, which owns it, is also the largest mining company globally. This multinational company, headquartered in Melbourne, is involved not only in copper but also in the extraction and processing of iron, diamonds, bauxite, and oil. It has facilities in 25 countries and employs 36,000 people. Like Rio Tinto—the world’s second-largest multinational in the global mining sector— the BHP Group is a product of the internationalization of the Australian economy. This global expansion is mainly tied to Australia’s major port cities and due to the difficulty of finding outlets for capital in a very small domestic market, despite the vast geographical expanse of the continent.

Copper Fever

In recent times, the BHP Group has seen a significant increase in profits thanks to the surge in copper prices on the global market. However, this has brought no improvement to the living conditions of the Chilean miners at Escondida, who, after several years (the last significant union action at the mine took place in 2017 and lasted 44 days), have gone on strike. On August 13th, the miners walked off the job following the failure of negotiations with BHP’s top management. These negotiations, between the company and the workers, who were primarily represented by Union No. 1, occur every three years. However, this year they resumed after the failure to reach an agreement created tension between the company’s management and the workers.

The strike quickly proved its effectiveness when the company softened its stance and, after three days, signed an agreement that included some wage and contract improvements for the workers. A union leader celebrated with perhaps too much enthusiasm by proclaiming, “It’s an absolute victory: the company gave us everything we asked for.” However, a 2% wage increase above the consumer price index isn’t much to celebrate over. Another so-called “concession” by the company was a contractual vacation bonus of 25,000 pesos—just over $27. This leads us to think that, once again, the workers have been deceived by their union, which quickly found an excuse to call off the strike.

Mining Disruptions May Have an Impact on the Market

At a time when the world industry is “hungry” for copper and the price of it is soaring, the miners’ strike posed a significant threat to the BHP group’s profits. The work stoppage of the Escondida workers was enough for the world price of copper to rise by more than 2%, proving how remarkable the strength of the proletariat has even as a small number of workers—just over 2,000 miners—take decisive action through an all-out strike. Despite the patience and calm exuded by financial analysts and company spokesmen, and despite what until recently appeared to be a relatively stable market, the bourgeoisie is perpetually beset by the nightmare of workers’ struggle. The union itself stated that workers at other facilities were closely watching the fight and awaiting its outcome. Union unrest in such a critical sector of the global economy consistently poses challenges for the Chilean bourgeoisie and their trading partners in the United States and China. The effect on the market is, of course, where the concerns of the bourgeoisie end. The workers, on the other hand, have more pressing concerns, such as the general rise in the cost of living, precarious working conditions, and a widespread sense of discontent affecting broad sections of the international working class.

A Scab in Sheep’s Clothing Is Still a Scab

The union’s negotiating delegation, after rejecting the company’s requests to delay or suspend the strike in order to avoid halting production, accused the company of not allowing enough time even to consult with union members. Furthermore, Union No. 1, prior to the strike, had denounced the company’s “anti-union practices,” as it had attempted to impose a contract without the legally required government supervision over labour contracts. The union later also accused the company of using scabs to circumvent negotiations and prevent any loss of profits—an entirely predictable move by the company—highlighting the fact that Chilean law prohibits such practices, even when strikers are replaced by internal company employees. But we know that these so-called “legal protections” are deceptive, and it is an undeniable fact that the bourgeoisie frequently breaks the very laws it has implemented to keep workers in check. After all, bourgeois law exists to protect private property in the long term, even if it may appear to side with workers in the short term.

Moreover, the production stoppage at the Escondida mine cost BHP an estimated 25-30 million dollars per day, and if the strike had continued, it would have impacted Chile’s national GDP. What’s more, inflation has once again disrupted the capitalist economy, wars have thrown off normal trade routes, and basic necessities are becoming increasingly expensive and difficult to obtain. How, then, could anyone believe that the bourgeoisie would hesitate to fall back on the age-old use of scabs?

The company insisted that the skeleton crew it deployed to keep the mine running during the strike were not scabs but simply non-unionized employees, mobilized as part of an emergency plan to prevent production—and the company’s profits—from coming to a complete halt. Generally, in order to respond to the anti-union strategies of the company, workers must prolong the strike and extend it outside the company confines.

The Possibility of Extending the Struggle

The protest at Escondida was also accompanied by labour unrest at another copper mine in Caserones, owned by the Canadian multinational Lundin Mining. One of the three unions representing the workers at the Caserones mine had also called for a strike after wage negotiations failed. But these two strikes were not merely abstractly connected. They took place within a vast network of interconnected industries: the copper miners in South America extract the ore, which is then sent for further processing in smelters in China, where 60-70% of the production flows. This is just a small detail, a tiny segment of the global economic system, that gives us an idea of the level of extreme economic integration that the capitalist mode of production has now achieved on an international scale.

The Barriers Against Generalizing the Struggle

Of course, there are many barriers that prevent the generalization of the class struggle to the entire proletariat. The bourgeoisie employs a variety of tactics to repress, intimidate, and threaten the working class.

An important factor that works in favor of the bourgeoisie is the separation of workers from one another, the atomization process that separates them. The bourgeoisie dreams of every worker feeling like an isolated island, and at times, it succeeds. The limited spread of union struggles across different regions of the world puts the proletariat in a precarious and dangerously weak position.

Copper miners in Chile face the endemic exploitation and alienation of capitalist social relations. Similarly, smelters in China operate under similar exploitative conditions. Moreover, the working class must contend with the opportunism of union bureaucrats and the fragmentation of their economic organisations, which hinder the development of a united class union. Even the Caserones mine is organised by three separate unions!

The Proletarian Solution Against the Bourgeoisie and Capitalism

Workers must come to believe that a working class united by a collective spirit and strong cohesion poses a lethal threat to the entire bourgeois mode of production.

The International Communist Party urges workers to fight for the unification of all their struggles, overcoming barriers of company, sector, and nationality. What is needed, then, is a generalized workers’ struggle that continuously brings in new masses of proletarians.

Our Party eagerly awaits the day when the workers of Escondida will return to the struggle, perhaps joining forces with those at Caserones, and eventually, the miners will be joined by the workers of the Chinese smelters. But we will not stop there. We will not stop until workers at every stage of the production chain are organised to defend their immediate economic interests and, tomorrow, rise together to bring an end to the ignoble capitalist regime.