Chilean Copper Mining- Facing a two-edged sword

The Global economy has been deeply affected by the COVID crisis. Mammoth economies like the UK and the US are officially experiencing recession now. Though experts predict a better scenario in the months ahead, revival seems to be a far cry for the smaller economies.Some countries are facing double trouble with pandemic and slumping economies simultaneously. The relaxation of the restrictions imposed during the peak period of the pandemic is adversely affecting their economies. Chile is one of them.

15% of Chile’s GDP comes from mining. Copper mining offers livelihood to millions of mine workers. But unfortunately, the mineworkers have proved to be the worst victims of the economic slump. According to Mitra SK, miners are posing the biggest threat to ordinary citizens. Almost 45% of COVID-19 patients are miners.

Mine Workers who are unaware of their infection, become the biggest threats for their families. Reports show that the disease is now rampant among mine workers. Many mayors have proposed a total lockdown for the mining sector to save the nation from the deadly virus.

But mining is the backbone of the Chilean economy, mining must be resumed to combat the looming recession. Therefore, the Chilean Government remodeled work regulations at mining sites to mitigate the spread.

Gloves and masks have been made compulsory. Sanitization of the sites has also been directed. The biggest reform undertaken, is to reduce the number of miners. Only 70% of the total miners are allowed to work to ensure social distancing at the sites. Mining companies are following the 14 days-off & on cycle for the miners, hoping that this leave system will help them to identify the infected workers.

According to the updated data, copper ore supply has resumed before the market ran out of the
ore. The demand for almost all the products has shot up post lockdown including copper, raising the demand for copper ore. After a brief slide, the prices have again picked up the pace. Copper price is expecting it to hit the mark of nearly $7000/ton till the year-end.

However, Chilean economists are far from happy. The increased demand may fuel the demand for mining, putting the lives of miners at risk but it will also result in sky-rocketing prices of copper ores.
In both cases, the Chilean as well as the global economy will face a lot of hurdles in combating the recession.