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Chilean copper miner Codelco and contractors fined following deadly mine collapse

According to public records requests, Codelco, a state-owned copper miner in Chile, was fined after a deadly mine collapse last year at El Teniente. Three contractors, whose employees were killed or hurt, were also sanctioned more severely.

Six contract workers were killed and others injured in the aftermath of the underground earthquake that occurred on July 31, triggering a rockburst at El Teniente - the world's biggest underground copper mine.

The files were obtained from the Chilean labor ministry by means of open-records request. In Chile, fines of this nature are communicated directly to the employers. They can be challenged administratively or reduced, but they are rarely made public.

At the time, the then-Labor minister Giorgio Boccardo announced that his office, along with the mining regulator Sernageomin would investigate whether there had been any violations of labor safety rules.

A quake measuring about 4.3 on the Richter scale halted all underground operations in the vast mine complex, causing rescue efforts and safety checks.

Codelco incurred a large production cost as a result of the collapse. The company said that the slow restart of underground operations and the shutting down of underground operations in El Teniente reduced copper production by tens thousands of tons. This disrupted shipments during a period of tight global supplies.

The accident also highlighted the?geotechnical risk facing Chile's old underground mines.

Contractors fined more than CODELCO

The records reveal that the three contractors received fines totaling about $87,000, while Codelco only paid out $20,000, reflecting Chile's system of split liability for subcontracted works.

Under Chile's labor law, while the principal company, Codelco, can be penalized for a wide range of safety violations, contractors are directly responsible for reporting accidents, risk assessments, assigning workers, and other compliance obligations.

Labor inspectors found that Codelco did not have a written procedure describing how seismic warnings are used to determine whether or not work should be halted or restricted.

According to a separate record of sanctions, after the accident, regulators found that Codelco had violated labor laws when workers were seen entering or preparing for entry into underground areas, while the mine suspension was still in effect.

According to Chilean labor laws, serious or fatal accidents can result in fines of up to 150 UTM, a Chilean tax unit linked to inflation, or approximately $11,000 today. In a 2007 case, the regulator imposed a penalty of 340 UTM, or roughly $26,000 today, on a construction company following a fatal accident.

Workers' safety specialists and labor advocates have questioned if such small penalties are enough to deter major employers.

In 2011, after a mining accident, a Chilean House of Representatives investigation commission reported that it was essential to increase the fines to deter mining companies from violating safety regulations.

Since then, proposals to increase fines for workplace accidents that are serious or deadly have failed.

CODELCO DETAILS CHANGES

Codelco said that since the collapse it has tightened safety procedures to restart work at El Teniente. This includes adding safety briefings before shifts begin, improving communication underground, increasing checks on worker's locations, and reviewing protective gear.

Later, it was revealed that an independent panel headed by a former Anglo American chief executive officer was investigating what caused the accident. They were also looking at whether management problems or workplace issues played a part.

Codelco stated in a press release that the seismic alert system was activated on the day of accident and that the Labor Ministry fine had been appealed.

The company said that a "legal proceeding is ongoing related to the supervision of worker entry during work stoppage", and it was waiting for a ruling from the authorities.

Codelco announced in August that Andres Musik, the El Teniente mine's manager, would be leaving his position. In February the company announced the departures of three senior executives after an internal audit revealed inconsistencies or concealment in the aftermath of a rock explosion at the mine a few years ago.

SUBCONTRACTORS WILL GET LARGER FINES

Zublin, a Strabag subsidiary, was among the three contracting companies fined. It was for "failing to report an employee's death in 24 hours." Inspectors discovered that the company was aware of the death within two hours but did not notify the labor authorities until evening the next day.

The report stated that it is important to immediately notify the authorities to ensure safety for remaining workers.

The Austrian company didn't immediately respond to our request for comment.

SalfaCorp, a Chilean construction company, was sanctioned for a death in the Andesita mine sector. Inspectors found that the company did not immediately notify authorities of the fatal accident, among other violations.

SalfaCorp stated in a press release that "internal protocol have been reviewed and strengthened to further strengthen safety standards and compliance in all of its operations."

The company said that the sanctions related to the reporting process and the labor requirements, and had nothing to do with the cause of the accident.

Chile's labor regulator fined Constructora Gardilcic as well, the unlisted contractor who was responsible for the deaths and injuries of workers in the Recursos North area of the mine.

Inspectors found that the company failed to report the accident on time, filed injury reports late and had a poor safety plan.

The authorities also found that Gardilcic failed to adequately account for the risks of violent rock explosions outside designated danger areas and placed some workers into jobs they weren't cleared to perform.

Gardilcic didn't immediately respond to an inquiry for comment.

LONG ROAD Ahead

Codelco said that the areas most affected by the accident would remain under strict restrictions as criminal, regulatory and technological investigations continue.

The company has promised a gradual restart that will be approved by the regulator, but it is unclear when normal operations can resume at the mine. (Reporting and editing by Christian Plumb, Aurora Ellis and Kylie Madry)

(source: Reuters)