Chile produced 378,261 mt of copper in March, down 23.1% from the year-ago month, as a strike at the world's largest copper mine bit into output, government data showed Friday.
Workers at the BHP Billiton-controlled Escondida copper mine went on strike for an unprecedented 44 days in February and March in a conflict over pay and conditions, halting all production at the open pit operation. It was the longest strike in the Chilean mining industry for more than four decades.
Unscheduled maintenance at another major mine also reduced output during the month, Chile's statistics agency INE said in a statement.
The monthly figure marked little changed from 376,948 mt in February, which also impacted by the strike.
Copper production during the first quarter totalled 1.208 million mt, down 14.3% Q1 2016.
The 2,500 unionized employees of Minera Escondida agreed to return to work in late March despite not agreeing to a new contract with management, opting instead for an 18-month extension of their previous contract. The move means that the two sides will have to hold fresh negotiations on a new contract early next year.
BHP Billiton is currently working to return the mine to its previous production levels but this is expected to take several weeks.
Earlier this month, Rio Tinto, which owns 30% of Escondida, estimated the mine will not reach capacity levels until July this year, suggesting the strike will continue to weigh on Chilean mine output well into the second quarter.
BHP Billiton has cuts its production forecast for the 2017 financial year to 780,000-800,000 mt, from 1.07 million mt previously.
The loss of production at Escondida due to the strike has forced the government to reduce its outlook for Chilean copper production this year. In April, the Chilean Copper Commission cut production forecast for 2017 to less than 5.6 million mt, down from 5.8 million mt estimated in January, as the conflict at the mine lopped 180,000 mt off its previous forecast.
Chile is the world's largest producer and exporter of copper, accounting for around 29% of global mine output last year.
The strike has also impacted production of other metals.
Production of gold, a byproduct at Escondida, fell 24.2% in March to 2,709 kg, compared to 12 months earlier, reflecting both the strike and the closure last year of Kinross Gold's Maricunga mine over environmental issues. Production during the first quarter totalled 8,298 kg, down 22% from 2016.
Production of silver fell 33.1% in March to 88,945 kg, and 33.1% in the first quarter to 283,385 kg.
Production of molybdenum, a key byproduct at several of Chile's large copper mines (but not at Escondida) rose 7.6% in March to 5,156mt, although production in the first three months of the year slipped 4.2% to 14,388mt. Given the importance of the Escondida mine to the Chilean economy, the strike has had an important impact on growth figures during the first quarter of the year.
After GDP contracted by 1.3% in February as a result of reduced mining activity, economists surveyed by the Central Bank earlier this month forecast flat growth in March.
