OUR COMMITMENT TO GOOD EMPLOYEE RELATIONS AND WORKING CONDITIONS

We are seeking to overcome the challenges faced by the organisation by exploiting Group synergies and fostering employees' commitment based on shared values, a vision of the business and attractive rewards.

WHY ARE LABOUR RELATIONS IMPORTANT?

The context of our business is changing. Modernisation, automation, and the proliferation of new technologies have become a reality in the mining industry, requiring us to develop a forward-looking employment culture. New generations of workers must be able to work in a collaborative, dynamic, diverse and flexible environment, which will require a significant effort by large companies.

The key to our past successes and future aspirations is leadership and the commitment of the 19,000-plus people working for the Group. We have therefore made progress by defining a leadership model that gives people the tools they need to develop their careers. It enables them to guide their own change, that of their immediate co-workers, and the organisation as a whole, as well as our relationship with those around us.

In mining, which operates shift systems, working conditions are a key factor in generating commitment and retaining talent. Employees' quality of life depends on having comfortable accommodation, good food, convenient transport, recreation and continuity of conditions.

Employee relations and working conditions affect not only our 5,026 direct employees, but also our 14,472 contractors, by creating a culture of well-being for them and their families. Centinela mine has the highest percentage of the mining division’s direct employees, at 40 percent, followed by Los Pelambres and Zaldívar at 18 percent each, Antucoya at 15 percent, and our corporate head office at 9 percent. The majority of contractors are employed at Los Pelambres (33 percent) and Centinela (30 percent).

Context
The Chilean mining industry directly employs 3 percent of the country's workforce. The Consejo Minero1 estimates that each of these jobs generates 2.55 indirect ones, so mining accounts for 9% of total employment.

Employee relations are governed by the Employment Code, which is enforced by the Employment Inspectorate. Labour reforms that came into effect in 2017 amended the Employment Code and posed new challenges for companies and trade unions.

Another piece of legislation enacted during the year, Law 20.015 on inclusive employment, requires companies with more than 100 employees to ensure that 1 percent of their employees are people with disabilities.

HOW DO WE MANAGE LABOUR RELATIONS?

I. PROFESSIONAL DEVELOPMENT OF OUR WORKERS

Our employees are the central focus of our Sustainability Policy. We aim to provide them with career development and mobility opportunities and in 2017 there were internal promotions within the Group. One challenge that we are working on is to ensure that the career development model is extended to the supervisor level, so that we can establish a training plan across the Group rather than on a case-by-case basis. The plan will provide routes for progression so that each supervisor has a clear picture of their steps towards career development, can prepare for promotions and can ensure the right professional skills are in place to meet the Company’s strategic objectives.

II. ENGAGEMENT AND EMPLOYEE RELATIONS

Engagement is key at Antofagasta Minerals, because the changes we have made in the past and the challenges we face now and in the future, have required and continue to require the effort, commitment and dedication of everyone in the Group. Having clear incentives, and enabling workers and supervisors to solve problems together, is a winwin strategy. It makes employees feel involved and enables us to use the talents that exist at every level of the organisation.

There are ten trade unions: three at Los Pelambres, four at Centinela, two at Zaldívar and one at Antucoya. 76 percent of workers belong to unions and are covered by collective agreements.

In 2017, we engaged in regulated labour negotiations with the worker’s union at Zaldívar under the employment code. This resulted in mediation by the Employment Directorate as part of the standard dispute regulation process. It is worth noting that we do maintain ongoing and proactive discussions with trade union representatives. There are also formal complaint and feedback mechanisms, such as on our website and through formal reporting channels. There were no strikes in the Group during 2017.

III. DIVERSITY AND INCLUSION

Any forward-looking company must encourage diversity if it is to remain flexible and up to date, nurture talent and maximise productivity. We need a new culture of greater openness, education, awareness and mutual respect.

We have developed a Diversity and Inclusion Strategy, to place more emphasis on this issue and give it direction, which was approved by the board in 2017. The strategy is based on a five-year programme aimed at enabling the Group to move towards an inclusive culture and lead the mining industry in terms of diversity. To do this, we need inclusive employment and people management processes, which we are hoping to develop over the next three years. We began drawing up a plan of action in April 2018 that is focused on four main areas: leadership, employee experience, commitment and organisational systems.

We do not have specific diversity and inclusion goals yet, but will decide these during the first review stage. In 2017, we had 433 female employees, representing 9 percent of the Company's workforce. This was a similar proportion to 2016 and above the 2017 industry average1 of 7.9%.

The proportion of women in management roles rose to 10 percent and 0.7 percent of our employees are of non-Chilean nationality.2

Between 2018 and 2020, we plan to employ more women, people with disabilities and people of other nationalities.

IV. QUALITY OF EMPLOYMENT

The workers at our mining operations rate the quality of their accommodation positively and also their pay, which is well above the minimum required legal salary. Since the sites work shifts, each provides accommodation, leisure and sports facilities to meet its own needs.

Mining wages are double the national average1. In 2017, we continued to update our supervisors' compensation scheme to reflect current market practice. This resulted in the creation of a flexible annual benefits system. Other employee rewards include annual preventive health checks, and health and life insurance.

We are also continuing to develop a special recognition scheme for innovative projects. This is managed internally by the Antofagasta Minerals Innovation Directorate, and rewards individuals who suggest significant improvements to working processes and methods that add value for the Group.

 

1 Source: Minería en números 2017, Consejo Minero.
2 These included workers from the following countries: Argentina, Bolivia, Brazil, Canada, Colombia, Cuba, El Salvador, France, Germany, Japan, Korea, Mexico, Peru, Spain, the United Kingdom, the United States, and Venezuela.