Codelco

Senseless Incentives

Abstract

The strike by nearly 6,000 workers at Chuquicamata in early January generated losses of US$16 million for the state-owned company and a cost of more than US$170 million. That is, to give one example, twice what the government has allocated to subsidizing youth employment. Yet if the dispute left anything beneficial, it was to remind us of the profound anomaly of a state-owned mining company that, behind the copper price boom, conceals serious inefficiencies paid for with lower fiscal revenue to finance public programs. Continue reading...