News / Americas

    Chile's Small-scale Miners Battling to Stay Afloat Amid Copper Rout

    FILE - Foreman Jorge Villanueva, left, and supervisor Omar Rosales, right, look toward the entrance of a tunnel drilled under the Chuquicamata copper mine in the Atacama desert in northern Chile, Sept. 25, 2012.
    FILE - Foreman Jorge Villanueva, left, and supervisor Omar Rosales, right, look toward the entrance of a tunnel drilled under the Chuquicamata copper mine in the Atacama desert in northern Chile, Sept. 25, 2012.

    Like his father before him, Alberto Carrizo has worked in Chile's copper mines since he was a teenager, supporting his family as prices for the metal boomed in recent decades.

    But as copper prices have slid to a more than six-year low, Carrizo and his colleagues laboring away at the countless smaller mines that pock mark the Atacama desert are finding the buckets of ore they spend all day digging from the ground are fetching less and less money.

    Some are responding by turning to gold mining, others are finding work in growing industries like renewable energy, while a dwindling few are hanging on, hoping prices will yet recover.

    They are at the sharp end of a commodities downturn that was triggered by slowing growth in China and which has led half of all the small mining operations in top copper exporter Chile to shut in the last eight years.

    Although 93 percent of the country's output comes from larger mines, a sharper drop in copper prices could send more small and medium-sized mines over the edge. Small mines generally employ up to 80 workers but are often much smaller, while medium-sized ones have a maximum of 400.

    The mass closing of mines represents a potential social and political disaster for Michelle Bachelet, who has staked her center-left presidency on improving social equality while keeping the country's famously successful economy ticking along.

    Copper makes up half of all of Chile's exports.

    Mines of all sizes shed some 23,000 jobs last year alone, around 10 percent of positions in the sector, making it by far the biggest loser in Chile's economy, according to data from the  government's INE statistics agency.

    Carrizo, 59, was one of 100 workers laid off from a medium-sized operation last year.

    Like many other miners who were let go by larger operations, Carrizo has since turned to small-scale mining and now spends his days 1,000 feet (305 m) underground, chipping away at the copper-rich bowels of a mountain he first visited while his father worked there in 1969.

    But his stint at the Rodesia mine, which overlooks the dusty streets of the tiny mining outpost of Inca de Oro, may be short-lived.

    "I've still got the strength to keep working another 10 or 15 years [but] things are complicated ... I'm going to look for a gold mine because prices are better," said Carrizo.

    Striking Gold

    Like their larger peers, small- and medium-sized mining companies are coping with the copper price drop by cutting jobs, reducing salaries and heaping more work onto fewer laborers.

    With leathery hands, miners at small-scale operations across the Atacama are painstakingly picking out rocks that contain higher-grade ore. When China's economy was still growing in double digits, or near there, it could hardly buy copper fast enough to manufacture wiring, cables and plumbing materials for its construction boom. The metal sold for a giddy $4.00 per pound or more - around double today's price - and miners would load trucks with as much material as possible.

    But now some are turning to gold, whose safe-haven status has driven up prices for the precious metal nearly 15 percent so far in 2016.

    "A lot of miners are moving to gold from copper because with the current level of the dollar it's very profitable," said Reinaldo Leiva, the top government mining authority in the Atacama region.

    "For the miner who has been working in mining for generations, it's very difficult to switch to another activity because it's all he knows how to do," said Leiva.

    Reuters spoke to a dozen miners who had recently made the switch to gold, or were looking to do so.

    Gray-haired Nolberto Barrera has been working in Chile's mines for half a century, after getting his start while still in school at the age of 12.

    "I was working at a copper mine but since prices have dropped I'm going to dedicate myself to gold. It's the only way to make a little bit of money," said Barrera, who even tried his hand at working at a local vineyard before returning to what he knows best.

    No Panacea

    However, Chilean gold production is tiny compared with its copper industry, accounting for just 1.3 percent of global output in 2015. It employed around 6,000 people in 2013, the last year for which reliable data is available. That makes it an unlikely panacea in terms of absorbing the lost jobs from copper.

    Although the sector has shrunk significantly since the height of the boom, as many as 27,000 people still work in small or medium scale copper mining companies in Chile.

    Between them, they are producing some 390,000 tons of copper annually, about 7 percent of Chile's total.

    "There are five or six [medium-scale] mines that if we don't do something in terms of supporting production, their operational continuity is in danger ... that's about 50,000 tons of copper," said Alberto Salas, the head of the Sonami mining industry association.

    Right now, only government aid stands between many small and medium mines and failure. State-backed loans, subsidies for essential ingredients such as sulphuric acid, and courses to help miners improve technical skills are among key measures.

    "Small-scale mining is a constant concern, which is why we've run relevant initiatives that increase productivity and strengthen the sector," Mining Minister Aurora Williams told Reuters.

    Under the most important of those initiatives, state-run mining company Enami purchases copper from such miners at a subsidized rate. Last year Chile spent some $22 million, and once prices recover the loans must be paid back with interest.

    But if copper prices fall further, industry insiders say such measures will not be enough. The government has set aside some $20 million through June for the loans and is currently paying miners up to $2.43 per pound for their copper, some 40 cents more than average spot prices, and has said that will not increase at least until midyear. But costs for small-scale producers average around $2.50 per pound.

    For Bernardo Carrizo, Alberto Carrizo's younger brother and a union head for small-scale miners, the government aid is crucial.

    "We still haven't stopped but we're swimming upstream," he said. "And what's coming doesn't look good because the trend [for copper prices] is lower."

    You May Like

    South Sudan Sends First Ever Official Olympic Team to Rio

    VOA caught up with Santino Kenyi, 16, one of three athletes who will compete in this year's summer games in Brazil

    Arrest of Malawi's 'Hyena' Man Highlights Clash of Ritual, Health and Women's Rights

    Ritual practice of deflowering young girls is blamed for spreading deadly AIDS virus

    Immigrant Delegate Marvels at Democratic Process

    VOA finds things Americans take for granted are special to foreigners

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Immigrant Delegate Marvels at Democratic Processi
    Katherine Gypson
    July 27, 2016 6:21 PM
    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.

    Video A Life of Fighting Back: Hillary Clinton Shatters Glass Ceiling

    Hillary Clinton made history Thursday, overcoming personal and political setbacks to become the first woman to win the presidential nomination of a major U.S. political party. If she wins in November, she will go from “first lady” to U.S. Senator from New York, to Secretary of State, to “Madam President.” Polls show Clinton is both beloved and despised. White House Correspondent Cindy Saine takes a look at the life of the woman both supporters and detractors agree is a fighter for the ages.

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.

    Video First Time Delegate’s First Day Frustrations

    With thousands of people filling the streets of Philadelphia, Pennsylvania for the 2016 Democratic National Convention, VOA’s Kane Farabaugh narrowed in on one delegate as she made her first trip to a national party convention. It was a day that was anything but routine for this United States military veteran.

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora

    More Americas News

    Venezuela Roils Corporate Profits in US, Elsewhere

    US firms operating there have increased use of accounting maneuver to insulate against worsening economic crisis

    US to Address Illegal Immigration From Central America

    Costa Rica will aid in screening, and Obama administration will expand Central American Minors program to provide safer, more orderly entries of qualified youths

    85 Russian Athletes Barred from Rio Olympics Over Doping

    Among them - 2012 Olympic champion Alexander Dyachenko, one of five canoeists named in recent WADA report, alleging state-sponsored doping cover-up

    Commerce Thrives on US-Mexico Border

    Locals say there are many entangled issues at the border that require clearheaded examination, not heated rhetoric

    Colombia Declares End to Zika Epidemic Inside Country

    Colombia has reported nearly 100,000 cases of infection, with 21 cases of Zika-related microcephaly

    Life on the Line in Venezuela as Economic Crisis Worsens

    As country's lines have grown longer and more dangerous, they have become not only the stage for everyday life, but a backdrop to death