CHILE: THE STRUGGLE IN THE COPPER MINES
Gall, Norman
Chile is now the owner of its mines, and the workers must know that copper is the wage of Chile, its principal wealth. Copper earns 83 percent of Chile's foreign exchange income. Of Chile's total...
...The government in Santiago exerted pressure on the company to settle these problems quickly so there would be no loss in tax revenues...
...Nationalization of Big Copper was completed in the months following Allende's inauguration...
...The tragedy of the Allende regime, however, is that the political and production difficulties at Chuqui and El Teniente can be pro jected on a much larger screen...
...These problems are the price we must pay...
...Beyond this, it showed the workers' essentially conservative interest in their jobs, and the ease with which they could hold hostage the Chilean economy...
...So copper is fundamental...
...The rightist enemies of the Unidad Popular have chosen Chuqui as one of their principal themes, because there are problems they can exploit politically...
...Frei said that his main reason for favoring "pacted nationalization" was "not to disturb what we were doing: so the work to bring into production the new Ex6tica mine would continue, and also the expansion program at El Teniente...
...This year we have lost 12,000 tons of production for the same reason, at a cost of $12 million...
...But instead of buying political stability for the companies, the "Chileanization" deals of the mid-1960s and the high copper prices and corporate profits of the Vietnam war period merely fueled the pressures for nationalization...
...The weapons used by the Chilean nationalists were almost wholly political, while those of Anaconda and Kennecott were mainly technological...
...However, its criticism of government mining operations—especially at its Chuqui stronghold—has appeared often in the conservative press...
...The Chilean technicians trained to bring this new process into production have all left to work in other countries—some say they were invited to leave by Communist and Socialist union leaders...
...Of these, 40 were fired after an abortive supervisors' strike in August...
...More properly, the argument should be put that the large industrial countries need secured sources of raw materials so badly that they will pay the price of neutralizing economic nationalists who threaten to upset the old and dependable system . 3 Moran argues that Chile nationalized its Big Copper just at the time when scarcity was being replaced by abundance in the world copper market as a result of a return to normal from the extraordinary demand of the Vietnam war years and the opening of new mines in the early 1970s by the multi 31 bid...
...Chile's vulnerability soon became apparent...
...The main smelter at Chuquicamata is housed in a high, cathedrallike shed with light streaming in from the far end...
...During these years, the big American copper companies in Chile— Anaconda and Kennecott—had developed an experienced staff of Chilean mining engineers, geologists, and other supervisory personnel who, it was widely viewed, could be expected to run the mines if and when they were nationalized...
...technology has been a much greater factor in the nationalization of the Chilean copper industry than, say, in Fidel Castro's nationalization of the Cuban sugar industry in 1959-60, since the newest Cuban sugar mill had been built in 1927...
...A new diesel-electric motor costs $30,000...
...Frei's failure to relieve the Chuquicamata community's fears showed in the local results of the 1970 election, which conservative ex-President Alessandri—always a friend of the copper companies—won in this traditionally leftist community because he was the only candidate to take a clear stand against further nationalization...
...but this raises the danger that molten copper will burn through the wall of the converter near the lip...
...The nationalization was carried out in such a way as to virtually ensure disturbance of the flow of badly needed supplies and technology into the copper industry...
...But they still have the ability perhaps—depending upon the pricing and marketing strategies of the new nationalistic "independent" producers in the CIPEC countries—of eroding the position of the governments that have nationalized their former operations, if not undermining the position of those governments in the international industry entirely...
...Most corporate boards of directors have no such future in mind...
...Still, the labor movement gained strength steadily during the 1950s, especially after all the unions in the copper industry joined in 1956 to form the Copper Workers' Confederation under Communist and Socialist leadership...
...Our technicians don't seem to have the interest or capacity for solving political and social problems, and don't seem aware of what's happening in Chile today...
...Nationalization of Chile's Big Copper was the result of a movement gathering strength throughout the postwar period and embracing conservative business leaders as well as Marxist and Christian Democratic politicians...
...Our wonderful company hospital will become part of the National Health Service...
...The other work crews are found along the catwalks behind the converters, often sleeping or reading newspapers, sometimes walking over to the railing of the catwalk to peer into the converter to see how the copper is "cooking...
...The Exotica affair is evidence of Chile's continuing dependence on the world's technological centers, and of the consequences of plunging into nationalizing major industries without first finding solutions to such major problems...
...It probably would have cost Chile much less in the long run if an agreement had been reached with the copper companies for indemnization pegged to the completion of the expansion programs at Chuqui and El Teniente and the production increases planned when these investments were undertaken...
...ALL THROUGH the postwar years the word dependencia gained currency as an expression of economic nationalism, but at Chuquicamata it took on a special meaning...
...The Nuevo Trato has been a failure—merely the granting of exaggerated concessions to the companies in return for almost nothing...
...for three days or a week, but this practice has left no benefit for us...
...We are all going to become public employees...
...Today the new computer console, still unused, gathers dust in a corner of the El Teniente smelter...
...While Anaconda was caught virtually defenseless by Allende's "violent nationalization"— it had financed the $150 million Chuqui-Exotica expansion program and then had allowed its U.S...
...the giant vats move back and forth on stationary cranes above the smelter floor to receive the molten copper poured in glowing bursts of light and heat from the rotating maws of the converters...
...By July 1971, all parties in the Chilean Congress joined in supporting a government-proposed constitutional amendment empowering Allende retroactively to deduct all excess profits above 10 percent of book value since 1955 from the compensation to be paid Anaconda and Kennecott...
...Such improvisations, however, do little to relieve the overall dependence of great mines like Chuquicamata on U.S...
...The workers don't want to go to political meetings because they lose overtime...
...The labor of creating Chuquicamata in the beginning depended heavily on burros and Bolivian highland Indians who lived in caves they themselves had dug in the surrounding hillsides...
...During the 1960s, with rising copper prices and increasing political conflict over the future of Big Copper, the sindicato was transformed from a defensive into an offensive weapon...
...Once in a while, often at the prodding of the supervisors, they would don asbestos suits and masks and gloves to perform the unpleasant task of poking steel rods into the tubing of the converters to clean them and send more air into the molten bath...
...101 CHILE: THE STRUGGLE IN THE COPPER MINES The workers of Chuquicamata were privileged in yet another important sense: they have a very powerful union able to paralyze production and inflict great damage on Chile's economy...
...Although Anaconda made a net investment of only $93 million between 1930 and 1965 in its two Chile operations—Chuqui and the smaller El Salvador-Potrerillos mine—Chuquicamata alone generated $810 million in profits in the quarter-century from 1945 to 1969, with 60 percent of these earnings coming in the 1959-69 period...
...Sergio Cuevas, Chuqui's new supply and maintenance manager, told me: We are fighting for more autonomy here in Chuqui so we won't have to depend on the bureaucracy in Santiago for all we need...
...It is impossible for a layman to determine whether this major setback for Chile's copper industry was anticipated by Anaconda in the years before nationalization...
...Was this failure a result of the company's negligence...
...Switching to another supplier may mean a decline in production...
...Discussing the impact of these developments on the world copper industry, Moran concludes: Economic nationalism hurt the multinational copper companies not only in the loss of revenues from the mines...
...For example, the workers refuse to do a full day's work, yet are always pushing and maneuvering to be assigned overtime...
...There are few people who both know about copper and have the government's confidence [he told me...
...government expropriation insurance to lapse—Kennecott had been much more astute in protecting itself against political uncertainties...
...My resignation is a consequence of attitudes and actions of certain personages, high-ranking executives in some cases, who fly their own flags and interpret government policy in their own way...
...The expansion was financed by the $80 million paid by Chile for its share in El Teniente and a $110 million loan from the U.S...
...When the workers of Chuqui went on strike for a 70 percent wage increase a few weeks after the 1970 election, President-elect Allende denounced them as "a labor aristocracy...
...JUAN TITICHOCA, a husky, round-faced man in his late thirties with the surname and the physical appearance of a Bolivian highland Indian, was assigned to the smelter several years ago...
...One hopes the present difficulties are temporary...
...The companies have been hurt more by the challenge to their position, or to their very existence, as viable integrated corporations...
...In 1967, as the Vietnam war pushed world demand and prices for copper to unprecedent heights, Anaconda's Chilean operations accounted M for $4.05 of the company's total earnings per share of $4.31...
...A single Lectra-Haul tire stands eight feet high and has a landed cost in Chile of $4,000...
...Apart from these conflicts, the mine was kept under stress by two problems: maintenance and replacing the 130,000 spare parts kept in stock at Chuqui's warehouses, and solving the difficulties arising from a nationalization undertaken before the $150 million expansion program could be completed...
...The operational crisis and rivalries among the political appointees representing the six Unidad Popular parties became interlaced with the power struggle between the union leaders and the new political appointees who held key management positions...
...Under the union's strict seniority rules he rose to assistant capataz with responsibility for Converter No...
...today the prodigious task of moving ore and rock out of the mine is performed with huge machines, 100-ton trucks and shovels with a bite of 13 cubic yards, whose movements have been carefully programmed to create economies of scale and reduce the risk of human failure...
...The New York office did Chuqui's accounting as well as its research and development, planning, budgeting, sales, purchasing of about $20 million worth of spare parts annually, and the design of the new equipment for the expansion program that was to be completed in 1971...
...The monopolization of new copper technology by the metropolitan corporate establishment, coupled with recent trends in the world copper market, has amplified the effects of the political and production difficulties at Chuquicamata...
...When the next work crew arrived at 8 A.M., the men found that the molten copper had burned a hole about the size of a Volkswagen in the wall of the converter and had spilled onto the smelter floor...
...108 national corporations in such "safer" areas as Canada, Australia, Iran, New Guinea, and Mexico...
...When President Frei went to Chuqui in July 1969 to explain the "pacted nationalization" agreement with Anaconda, he tried to calm such fears: Many people play a strange role...
...on the morning of December 8, 1971, the capataz Juan Titichoca left his job on the night shift, as usual, a halfhour ahead of schedule, leaving his Converter No...
...In a radio speech during the strike, Silberman threatened to prosecute the union leaders for subversion under the State Internal Se curity Law...
...Although, for example, there were only five Americans among the roughly 600 supervisors working at El Teniente at the time of Allende's election and there was widespread belief in the capacity of Chilean technicians to run the mining and smelting operations, production at Chile's two biggest mines soon declined because of political trouble...
...Indeed, most of the battle over nationalization was decided before Salvador Allende, the candidate of the Unidad Popular coalition headed by the Communists and Socialists, won his narrow 1970 election victory —with only 36 percent of the vote and a 1.4 percent plurality...
...These nations generate three-fourths of the world copper trade and have joined in CIPEC (InterCHILE: THE STRUGGLE IN THE COPPER MINES governmental Council of Copper-Exporting Countries), a thus-far unsuccessful effort to coordinate prices and production...
...When the smelter workers sud denly walked off the job, they refused to empty the molten copper then cooking in the converters...
...Nevertheless, Big Copper in Chile is confronted today with the specter of the nationalized tin mines in neighboring Bolivia, where production declined by one-half after nationalization in 1952 and effective control of the mines fell into the hands of the leftists miners' sindicatos until, in 1965, the army was sent into the mines to break up the unions and install a repressive managerial regime of the state mining corporation...
...The problems in the mines are mainly political and social...
...The smelter floor is strewn with slag anddiscarded machinery...
...Because of mechanical breakdowns in the smelter, ore concentrates that normally would be processed at Chuqui were being shipped in rented trucks to other smelters hundreds of miles further south along the coast, which greatly increased production costs...
...of England, which has just built a miniature pilot plant in England that processes the ore in liquid solution at the rate of one gallon per minute...
...Recently, Exotica's heavy trucks and machinery were moved to Chuquicamata to remove a large accumulation of waste material covering the ore body that had caused a major landslide three years ago...
...Acting on a controller-general's financial assessment, Allende two months later decreed $774 million in penalties against the two copper companies for excess profits and alleged defects in their expansion programs...
...We will have problems, but we will solve them...
...If we can't get spare parts in the U.S., we'll go elsewhere...
...In wildcat strikes the workers would simply withdraw to their lunchrooms and refuse to talk with their supervisors until union leaders and management representatives appeared...
...The new Exotica mine went into production shortly before Allende's election, but there promptly arose serious metallurgical problems...
...one recently imported motor was burned out for lack of oiling, and a new locomotive was destroyed on its first day of operation because a rail was left out of place [sic...
...In Santiago they demand of me an immediate and violent nationalization...
...by obtaining a federal court order freezing all Chilean government bank accounts because of Chile's failure to pay creditors' notes that had fallen due from Frei's "Chileanization" agreements...
...Export-Import Bank...
...The sindicato at Chuquicamata is controlled by a group of dissident Socialists, the Union Socialist Popular (USOPO), which had been the most anti-Communist faction of Chile's Socialist party until it CHILE: THE STRUGGLE IN THE COPPER MINES left the party altogether in 1969...
...2 An even graver problem occurred in the "violent nationalization" of El Teniente, the world's largest underground metal mine, in which the Frei government had acquired a 51 percent interest from Kennecott a few years before...
...Silberman told me that "only 17 of our 35 Lectra-Haul trucks are working now because of operational problems...
...The slag is recovered by bulldozers that crawl over the floor, driven by sweating men wearing industrial helmets and masks In the 1970 union elections, five USOPO representatives were chosen for the union's executive committee, compared with two Christian Democrats and one seat each for the Communists and Socialists, plus one Independent...
...The capital investment and complexity of industrial installations in Chilean copper also is immeasurably greater than that in Cuba's old sugar mills...
...This was the third major accident in the smelter within a month...
...With the work on these projects still uncompleted when Allende took office, the "violent nationalization" of Big Copper by the new government left Chile in a vulnerable position...
...USOPO lawyers later explained to me: "Titichoca was a pawn...
...They're supposed to be manufactured here in Chile, but the big tire factory in Santiago has just been taken over by the government and they haven't been able to import rubber because of dollar shortage...
...When the Guggenheims sold 51 percent of Chuquicamata in 1923 for $77 million, it was then the biggest cash deal in Wall Street history...
...to be trained in the new process, including one engineer who spent 20 months there helping to develop a system of computer control of the mixture of oxygen, concentrates, and molten copper inside the converters...
...corporate balance sheets...
...Now we must solve these problems for ourselves...
...So there are vices that must end, compaheros, inherited vices such as the loss of production time in the smelters, 30 minutes at the end of each shift and 15 minutes at the start, 45 minutes in all...
...Did Anaconda have untested formulas for the solution of this problem...
...MeanCHILE: THE STRUGGLE IN THE COPPER MINES while, rush orders for cheaper Japanese copies of the Lectra-Haul tires, 250 of them, had been placed and the first shipments were being flown to Chile from Japan...
...These negotiations lasted throughout December 1971, and by the time they were concluded the political climate at Chuquicamata had been profoundly disturbed by Zausquevich's dramatic resignaNORMAN GALL Lion...
...To avoid performing this stoking operation, the converter crews have taken to tilting the mouth of the converters at an extreme angle, so air will enter the bath without stoking...
...For example, it is necessary sometimes to pay 60 days' wages for a job that takes 20 days...
...This crisis was exacerbated by the departure of nearly half the 466 supervisors working at the mine at the time of Allende's election...
...Chilean nationalists long have been mystified and infuriated by this kind of corporate manipulation, and it was this fury that perhaps made nationalization inevitable...
...But it is a measure of the weakness of this government elected in 1970 with the support of barely one-third of the Chilean voters, and of the competitive friction between the six parties composing the Unidad Popular coalition, that it has devoted more energy to small-time political jockeying than to maintaining intact Chile's most important industrial organization or to minimizing the transitional shock of nationalization...
...Between 1948 and 1952, after the outlawing of the Communist party, some 2,000 workers—many of them union activists—were fired from Chuqui, charged with being Communists...
...President Salvador Allende, speech to the workers at the Chuquicamata copper mine, October 1971 Chuquicamata, the world's largest and richest open-pit copper mine, forms an enclave 10,000 feet high in the Atacama desert of northern Chile...
...In the few months that I've been here, 15 trucks have been scrapped because of crashes, and another eight are idle because of a lack of spare parts: The Americans didn't give cars to any damn fool without a license, so there weren't the kind of stupid crackups there are now...
...II During my visit to Chuquicamata I had a long talk with David Silberman, the new Communist manager, who soon after his appointment had become a central figure in the struggle for control of the mine between the union leadership and the Communist party cadres assigned to executive positions...
...These difficulties, unfortunately, have undermined the potential advantages of socialism, which in a country like Chile is not state ownership as an end in itself, but the rationalization of production and distribution of limited resources...
...What the country does need is large new investments in copper production...
...Because these penalties were greater than the book value of the mines, the government claimed that it owed the companies no indemnization...
...While it is very common for large industrial enterprises to suffer production declines in the first months or years following nationalization, these declines can usually be overcome if self-destructive policies are not blindly pursued...
...The effects of the decline in industrial discipline—both before and after nationalization— were vividly described by President Allende in a blunt speech to the Chuquicamata workers a year after his election: Within one month in the sulfide concentrating plant five mill-supports have been burned out...
...In its offer to the Frei regime to sell 51 percent of El Teniente under the "Chileanization" program, Kennecott remained as manager and 49 percent owner of a company worth four times as much in book value as before "Chileanization" and producing 64 percent more than before, while its tax rates were NORMAN GALL halved...
...Dependence on U.S...
...But the eventual major confrontation came about almost by chance— over the fate of smelter work-gang capataz (foreman) Juan Titichoca, whose apparent negligence resulted in a bizarre industrial accident that polarized the struggle for power at the mine...
...A few days before my arrival at Chuqui the respected production manager, Andres Zausquevich, resigned in protest against "several tendencies within the Unidad Popular fighting for maximum control of activities at the mine...
...After the newly installed Marxist regime of President Salvador Allende in 1971 quickly consummated the nationalization of the big foreign copper companies, Anaconda President John B. M. Place said: "The confiscation of Anaconda's Chilean properties was a rough blow that took away two-thirds of our copper production and three-fourths of our earnings...
...concentrates could be fed directly into the cylindrical converters without passing first through the reverberatory furnaces, which represented a large saving in both smelting time and operating costs...
...I admit that the government has committed serious errors at Chuqui [Silberman continued...
...The basic principle behind this increase in smelting capacity was a pioneering oxygen-injection process by which cold 2 From Theodore H. Moran, "The Multinational Corporation and the Politics of Development: The Case of Copper in Chile, 1945-70" (Doctoral thesis, Government Department, Harvard University...
...A contract for development of an industrial process for treatment of Exotica's ores has been given to the Power Gas Co...
...The state sector of the economy has expanded enormously since Allende came to power, but the operation of the newly seized and/or expropriated farms and factories has been paralyzed by political rivalries—like those in Big Copper—among the Marxist parties of the Unidad Popular, whose managers have little experience in production and have relegated economic considerations to a secondary level...
...The supervisors who left the mine were replaced either by less experienced subordinates or by other technicians, many of them recent graduates, from outside...
...Whereas the union previously had acquiesced to the firing of Titichoca, his name suddenly became the watchword for the defense of labor's rights...
...Indeed, while Kennecott was taking advantage of the tax and foreign exchange concessions enacted under the "New Deal" to extract profits averaging 37.9 percent yearly in the 1955-60 period from its El Teniente mine, it nevertheless spent $100 million on building a huge refinery to process Chilean copper in Maryland instead of in Chile itself...
...The $563 million expansion program was scheduled to double Chile's Big Copper production from around 600,000 tons per year to more than 1.2 million tons by 1972...
...This week, when the conveyor belt that brings concentrates into the smelter broke down, the workers asked for 40 hours' pay to do a job that took them less than six hours to do...
...The freezing of our New York bank accounts lasted only a few days, and this kind of thing does not prevent us from buying in the U.S...
...It also became clear that, while Chile had lived off the copper industry in world trade for most of this century, few Chileans were sufficiently experienced to run the industry, and even fewer had any experience in the intricacies of overseas trade...
...This practice has caused constant bickering between the workers and their supervisors, as has the custom of the converter crews walking off their jobs a half-hour before the end of each shift— leaving the converters unattended...
...By 1970 the Chilean treasury was receiving 84 percent of Big Copper's profits in the form of taxes and stock dividends...
...We're the ones who should be teaching and giving orders to them...
...Our worst spare parts problem is tires, big ones and little ones...
...At this writing, the investment of $44 million in the opening of Ex6tica, which involved large expenditures for equipment, installations, and the removal of 100 million tons of sterile earth and rock to get at the main ore body, has produced no benefit for the Chilean economy, whereas its scheduled production was to have meant a 20 percent NORMAN GALL 106 increase in its copper output...
...Until recently Chuquicamata had been a carefully structured American-style community of 30,000 persons, with power residing in the "American Camp" on a hill occupied by the company-owned houses of the 450-odd Americans and Chileans on what was known as the "gold roll": those professional and technical contract employees who earned their salaries in dollars...
...if three supervisors and a worker had not stepped in to empty the converters and the copper had been allowed to solidify inside, major damage would have resulted...
...Moreover, not one cent of new Kennecott money went into the $247 million expansion plan at El Teniente...
...Repayment of this $190 million total was guaranteed by both the Chilean and U.S...
...His case was a pretext to begin the fight between the Communist management and the USOPO union leaders to see who was boss at Chuquicamata...
...I think that we ought to apply the same system to the Gran Mineria [Anaconda and Kennecott], and I am sure that the United States won't object...
...The trepidation with which this privileged and isolated community received the news of nationalization was understandable...
...The aim of these arrangements," said Robert Haldeman, head of Kennecott's Chilean operations, "is to insure that nobody expropriates Kennecott without upsetting relations to customers, creditors, and governments on three continents...
...When I visited Chuquicamata for 10 days in February 1972, it was clear that the old hierarchical structure was swept away but that no working order or consensus had been created to replace it...
...A union delega tion then traveled to Santiago to present a bill of complaints to President Allende...
...Many technical problems in the past were solved by Anaconda flying down engineers from the U.S...
...This consensus on the nationalization of Big Copper represented much more than the euphoria of a newly installed leftist government...
...With the Alliance for Progress, the fate of the copper companies was placed on the same legislative trading block as the Christian Democrats' agrarian reform program, which had threatened conservative interests...
...Its workers were among the best-paid in Chile...
...The power of this oligopoly has been sharply curtailed by the copper nationalizations over the past few years in Chile, Zambia, and the Congo, and the threat of it in Peru...
...There is nothing in history or logic to suggest that the major producers or fabricators or consumers will stand still and have the terms and prices of production dictated to them by outsiders...
...4 cooking at a very high temperature and tilted at a dangerous angle...
...Replacement parts for the huge trucks are very expensive...
...At stake is not only Chile's largest economic enterprise and its capacity to earn dollars on the world market, but also whether Salvador Allende's coalition possesses enough realism, toughness, and discipline to survive...
...In return, the workers' fear about the future was 102 translated into expressions of distrust of the relatively inexperienced newcomers who replaced the departed Anaconda technicians...
...In one year some recent graduates have risen from junior engineers' jobs to section chiefs...
...Production at the smelter in 1971 declined by nearly 20 percent instead of increasing by the 55-, percent envisioned in the expansion plan...
...The lesson of Chuquicamata can be extracted from the recurrent conflicts between political and economic priorities since nationalization...
...The large multinational corporations are by no means all-powerful...
...For these reasons Chile today is experiencing its worst economic crisis since the Great Depression...
...And here, among the workers, they say: "What is going to happen to you now...
...The test of strength over Titichoca revealed not only the degree to which political rivalry had affected the functioning of Chuquicamata, but also how thin was the line of continuity in the mine...
...others say they were lured to new jobs abroad by Kennecott...
...Apart from this support, Chuqui was a privileged community...
...The nationalists may currently prize their "independence" precisely because they believe, on the basis of the great copper shortage during the Vietnam War, that they have achieved this dictatorial bliss...
...its 450 supervisors lived in free company housing and earned their salaries in dollars (which gave them substantial advantages on the black market...
...This whole mineralrich coastal desert was wrested by Chile from Bolivia in the War of the Pacific (187984), which converted Chile from an agricultural republic into a leading supplier of nitrates and copper to the world's industrializing economies...
...CHILE: THE STRUGGLE IN THE COPPER MINES...
...governments in case of expropriation...
...The appointment of Silberman, a Communist, as the new general manager of Chuqui was the signal for the all-out politi cal struggle to begin...
...These giant vehicles, with a 100-ton capacity, were purchased by Anaconda at a cost of $263,000 each and are the mainstay of the extraction from the great pit at the rate of 90,000 tons of ore and 55,000 tons of waste material a day...
...Outright nationalization followed hard upon the "Chileanization" program of Christian Democratic President Eduardo Frei (1964-70) , which increased Chilean state financial participation in the copper industry while inducing the foreign companies to make major new investments in order to double Big Copper's 100 production capacity by 1972...
...As early as 1961 leading conservative Senator Francisco Bulnes voiced the growing bitterness about the copper companies in the rightwing newspaper, El Diario Ilustrado: There is no need for social change in Chile, since the country has had many social laws on the books for over 50 years...
...When I visted Chuqui, the expropriated copper companies cast doubt on the possibility of regularly getting spare parts in the U.S...
...However, after 20 years of preaching nationalization, Allende gave these economic considerations a low priority...
...The Americans have left Chuqui, but their influence has remained in the way the technicians and professionals live...
...A high-strung engineer in his midNORMAN GALL thirties who had spent nearly all his professional career at government desk jobs in Santiago, Silberman is one of several Communists and Socialists named by Allende to key posts in Big Copper without any previous experience in the industry...
...As Theodore H. Moran wrote in his penetrating study of Chilean copper: "The trick for the nationalist is to take as full advantage of the foreign corporations as he can while they are within his range, and not to push them out before he has learned or can learn to duplicate their feats on the international as well as national scene...
...At 7:30 A.M...
...We don't know where these people are taking us," they told me again and again...
...These `partial stoppages' became increasingly frequent during the 1960s because the price of copper was very high and it was unthinkable to let all production stop because of a petty conflict over work rules," one veteran supervisor told me...
...When nationalization came, fear of losing their privileged status within the Chilean working class was their first concern...
...It was impossible to process Ex6tica's copper under any known formula because it is contained in what is known as a fractured ore body, in which there are great differences in the composition of the material between one part of the deposit and another...
...They are going to take away our indemnization for years of service, and all our guarantees...
...IN THE BATTLE over the nationalization of Big Copper, it soon became apparent that the two sides were fighting with different weapons...
...The pit forms a gray-green elliptical amphitheater, two miles long and one mile wide, graded down toward its ever-deepening bottom by terraced benches 100 feet wide, blasted into existence over the past half-century by dynamite explosions and excavations that have removed 1.2 billion tons of material...
...They don't know what they're doing and things are in a mess...
...It would be better if the United States quit stirring up economic and social problems...
...Recently we have seen a clash between workers and bosses, involving some political parties and a struggle for power at the mine...
...It reflected growing hostility of leading conservative businessmen and politicians toward Anaconda and Kennecott, especially after the companies' failure to plow more money into a Chilean expansion, even after generous incentives were granted them NORMAN GALL under the 1955 "New Deal" (Nuevo Trato) copper legislation...
...Yesterday a truck driver was arrested who was carrying copper bars with other things inside some barrels...
...Now the state is going to take over...
...Companeros, last year [1970] after the union contract was signed, we lost $36 million worth of production because of wildcat stoppages that lasted hours or days in different sections...
...Besides, the Anaconda era has left behind many labor vices...
...Moreover, the payroll was swollen by swarms of new nontechnical personnel, such as sociologists, psychologists, and public relations men, who soon plunged into political work in behalf of the Unidad Popular or into infantile rivalries among themselves...
...Of Chile's total exports of $1.15 billion, copper produces $800 million, and provides 25 percent of the government budget...
...Therefore, if the companies cannot be made to launch a huge new program and let the proceeds flow to develop Chile as the Alliance envisions, the government should nationalize them...
...The USOPO union leaders and the Communist managers at Chuqui had been jockeying for position for months...
...A key maintenance supervisor told me: Every week there are two or three crashes of our vehicles...
...When President Frei went to Chuquicamata in July 1969, he explained why he had opted for a "pacted nationalization"— as opposed to the "violent nationalization" urged upon him by his Marxist opposition...
...Second, many people came here as political appointees with big salaries, which offended a lot of people...
...Several Chilean technicians from the El Teniente smelter were sent to the U.S...
...When Al lende refused to see them, the 5,000-word document was leaked to El Mercurio, fea turing the union leaders' contention that "the sectarianism at the mine, the bitter struggle among some parties to obtain this or that post, the denial of recognition to our union for effective participation of the workers will produce chaos...
...4, one of the huge cylindrical ovens into which molten copper is poured for its final stage of heat purification...
...At the time government representatives were sent to take control of El Teniente, a $247 million expansion program was being completed to increase production from 180,000 to 280,000 tons of copper per year...
...Yet, under pressure from Santi ago, the new management gave in to the union's demand for Titichoca's reinstatement and the wildcat strike ended...
...Copper production at Chuqui for the first six months of 1972 was running at 23 percent below the average for the corresponding six months of the previous three years, while world copper prices had declined proportionately even further below the levels of the 1967-71 period...
...Chuqui alone earns one-third of Chile's desperately needed foreign exchange income each year...
...104 to protect them from the fumes...
...Then there is the question of overtime for repair work that is inherited from the old days...
...First, the general management of the company in Santiago was in the hands of people who called themselves technicians but were neither technicians nor politicians...
...An asphalt road leads to the great mine, from the Pacific Coast port of Antofagasta through the reddish desert and past the ghost towns of abandoned nitrate oficinas which, a half-century after the collapse of Chile's nitrate boom, look like archeological relics caked with sand...
...However, despite the leftist leadership, the privileged and isolated position of the copper workers has led them to focus on bread-and-butter issues rather than on the political goals of their leaders...
...The union pushed the matter into a wild cat strike that shut down the smelter for four days, costing Chile about $4 million...
...Careful maintenance of the trucks is indispensable for making Chuquicamata's enormous investment in mine machinery— including 17 electric excavating shovels that cost $1.2 million each—an economically rational operation...
...Yet we know that Chile has taken a great step in nationalization, and we must produce copper—one way or another —because there is nothing else we can do to survive...
...If this failed to produce satisfactory results, a technician was flown to Chile from the U.S...
...Also, a tendentious but penetrating three-part "Inside Chuquicamata" series had appeared in El Mercurio of Santiago, the lead ing opposition newspaper, that made de tailed accusations of mismanagement and political meddling on the part of the new executives, concluding with the prediction that, "undoubtedly, the Communist party will control Chuquicamata in a very short time...
...When I came to Chuquicamata, the mine was in crisis operationally because it had been nationalized just as a major expansion program was being completed—which is usually a problem-ridden stage in the life of any enterprise...
...technicians at Exotica doubt whether this process could be mounted on site to treat Exotica's ores on an industrial scale within the next three years...
...The Chuquicamata management immediately suspended Titichoca and conducted a formal inquiry, required by law before any worker could be fired...
...If a piece of major equipment broke down and could not be immediately repaired, Chuqui's managers were on the radio to New York for instructions...
...Although the surface outcroppings of Chuquicamata's copper had been continuously exploited since preColombian times, it was not until the Guggenheim interests brought in steamshovels from the Panama Canal to dig the huge pit that Chuquicamata was launched into its spectacular career as a contributor to U.S...
...And a young Communist mining engineer, a pillar of the present management, explained to me: The beginnings of the labor movement at Chuqui were very difficult...
...suppliers...
...Every day the American manager of Chuquicamata spoke by shortwave radio with Ana conda's headquarters in New York to report on the day's production...
...Besides this, there is theft, companeros...
...By 1969 President Frei had announced a "pacted nationalization" of Anaconda's properties providing for 51 percent government ownership immediately and the right to purchase the remaining stock after 1972...
...Indeed, the downward pressure on prices would be much greater than it is today if Chile were not going through its present postnationalization production difficulties, and if Zambia—which together with Chile produces half the world's export copper—were not still suffering the consequences of a disastrous cave-in in 1970...
...Without the necessity of alleging either malice or conspiracy, it is evident that the large copper companies are acting to the extent of their powers to protect themselves...
...In 1969 the conservative National party President Sergio Onofre Jarpa acidly remarked: "The United States told us to have an agrarian reform with a 30-year term of payment...
...As a result, the extraction of ore from Exotica has been suspended...
...Of course not...
...Today, however, it is a community in crisis, a "sick giant" as President Allende described it on July 11, 1971, the day nationalization was formally proclaimed...
...1 The USOPO party expresses support for the Unidad Popular coalition without formally belonging to it...
...The expansion was to increase Chuqui's smelting capacity by half to about 1,200 tons of copper daily, but instead of rising, production had declined in 1972 from the previous level of 800 tons daily to about 500 tons at the time of my visit...
...When I suggested to a key Communist manager at the mine that the Unidad Popular regime might well concentrate on consolidating the transition to state ownership before plunging into the difficult task of political conversion of Chuqui's suspicious and recalcitrant workers, he replied: "Do you think the Communist party would ever send its cadres here without their getting involved in politics...
...Another $45 million was raised by long-term future sales of copper to banks and manufacturers in Europe and Japan...
...Titichoca's dismissal had been delayed because the union and management were engaged in delicate negotiations for a new contract...
...Internationally, Big Copper until recently was an "integrated industry" in which 10 big corporations controlled 75 percent of the West's production in 1967...
...But this rationality is impaired when both the production and the terms of trade of Chilean copper are harmed by rash political acts, the consequences of which could easily have been foreseen...
Vol. 20 • January 1973 • No. 1
