The recently passed law had been under discussion since 2017

CRU's estimates of the effect in copper mining

Chile passed a new labour law on April 11, primarily to reduce the maximum number of hours worked to 40 per week. The current maximum is 45 hours, and the new law calls for gradual introduction of the changes, reducing to 44 hours in 2024, 42 hours in 2026 and 40 hours in 2028.
This raised concerns in social networks, where commenters asserted that more and more workers would have to work multiple jobs, with the added difficulty that AI is supposedly reducing the number of jobs available.
However, the mining industry appears to be quite supportive of the measure. Compañía Minera del Pacífico (CMP) jumped the gun in October 2022 by introducing a 40-hour limit for 350 employees out of its total workforce of 1,934 people. And Codelco announced in January that it would be able to reach the 40-hour limit two years early, in 2026, stressing that it sees the measure as a means of attracting and retaining talent.
On the other hand, CRU head of consulting in South America, Juan Esteban Fuentes, mentioned in a presentation at the CRU’s World Copper Conference (a week after the law passed) that the labour law should be considered as one of the major themes impacting the mining industry over the next few years, alongside the

creation of a new national constitution and the royalty law.
Companies can address the issue either by adding additional shifts or by maintaining current shift structures and making up the difference with overtime, paid at 1.5x the normal hourly rate. The CRU expects companies to prefer the latter case, and estimates that this will increase labour costs by 9.4%. By 2028, the increase in value-adjusted cash costs is likely to range from a best case of +3.6% to a high case of +12.5%
Lawyer Mirco Hilgers, of Baker Mckenzie Chile, also warns of possible negative consequences, saying that some companies may have to bring on more staff, which could result in a need for additional infrastructure and services, and all companies will have to consider the effect on their global competitiveness. «This could lead to reductions in investment and employment in the mining industry, and could make certain jobs less competitive against new technologies,» said Hilgers.
Furthermore, shorter working days could make companies less flexible at crucial times such as changes in demand or operating requirements, and if the change in working hours affects production then that will of course affect revenue, he added.

Mirco Hilgers, of lawfirm Baker Mckenzie

As standard, the new law sets a limit of working no more than six days per week, and no more than 10 hours per day. But for mining, which depends on operational continuity, the law maintains clauses allowing for «exceptional working days», which can be agreed with unions and authorized by the national labour office, Dirección del Trabajo (DT).
Until now this has allowed for shift systems of 7 on/7 off, or 4 on/3 off and the CRU expects the industry to maintain these formats. Late 2022, mining association Consejo Minero estimated that 85% of jobs in Chile’s mining sector follow the model of matching on/off periods, mostly 7/7.
Consejo Minero also calculated that the current 7/7 schedule adds up to 42 hours per week (including lunch hour), and the CRU expects 7/7 and 4/3 to each add up to 42.5 hours per week, of which 2.5 would be overtime.
The mining industry will also have the flexibility to

choose combinations of weekly totals in a month, such as two weeks at 45 hours and two weeks at 35 hours, Hilgers said, adding that this is a matter to be determined by the discussions with unions.
Still pending, however, is a pronouncement from the DT indicating how much the work schedules can change, he noted.
As for other majors following CMP and Codelco’s lead, Fuentes’ team believes more large firms have probably also done this, and while juniors may lack the resources to suffer additional costs, it’s more likely that early adoption of the 40-hour week is not on their radar simply because they have less interest in cultivating their image in the media.
Hilgers adds that the unions at other majors are sure to be watching these examples and will pressure their employers to do the same, but the reality of reduced working time means not all will be so willing.

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