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Good deposits are not enough: Mining labor productivity analysis in the copper industry in Chile and Peru 1992-2009

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  • Joaquín Jara, J.
  • Pérez, Patricio
  • Villalobos, Pablo
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    Abstract

    Chile and Peru produce almost 45% of world's mine copper output. This situation reflects their natural endowment and mining tradition, but is also the result of development processes undertaken over the last decades. As a result, both countries multiplied its mine copper production in more than 3 times in the last 20 years. Mining labor productivity played a central role achieving these amazing growth rates. Although there is a consensus about the relevance of this variable for the mining industry, the specific factors behind labor productivity changes are not completely understood. In this paper we use a panel data approach to analyze labor productivity in the copper mining sector in Chile and Peru from 1992 to 2009. This technique is consistent with heterogeneity among mines and allows us to identify, describe and analyze all the different sources behind labor productivity changes. The result of the analysis shows that better deposits and operational factors are important, but not enough to explain labor productivity improvements in the copper mining industry, and instead, company specific efforts and wide industry changes, such as technology and management innovations, are as important as the evolution of the reserve base or geological features of the operations.

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    File URL: http://www.sciencedirect.com/science/article/B6VBM-50X56P8-1/2/49b7c408455af7efd97cd2b21d5e95f5
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    Bibliographic Info

    Article provided by Elsevier in its journal Resources Policy.

    Volume (Year): 35 (2010)
    Issue (Month): 4 (December)
    Pages: 247-256

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    Handle: RePEc:eee:jrpoli:v:35:y:2010:i:4:p:247-256

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    Web page: http://www.elsevier.com/locate/inca/30467

    Related research

    Keywords: Labor productivity Copper Chile Peru Panel data Production scale Geological features;

    References

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    1. Stoker, Thomas M. & Berndt, Ernst R. & Denny Ellerman, A. & Schennach, Susanne M., 2005. "Panel data analysis of U.S. coal productivity," Journal of Econometrics, Elsevier, vol. 127(2), pages 131-164, August.
    2. Garcia, Patricio & Knights, Peter F. & Tilton, John E., 2001. "Labor productivity and comparative advantage in mining:: the copper industry in Chile," Resources Policy, Elsevier, vol. 27(2), pages 97-105, June.
    3. Darmstadter, Joel, 1997. "Productivity Changes in U.S. Coal Mining," Discussion Papers dp-97-40, Resources For the Future.
    4. Aydin, Hamit & Tilton, John E., 2000. "Mineral endowment, labor productivity, and comparative advantage in mining," Resource and Energy Economics, Elsevier, vol. 22(4), pages 281-293, October.
    5. Tilton, John E., 2001. "Labor productivity, costs, and mine survival during a recession," Resources Policy, Elsevier, vol. 27(2), pages 107-117, June.
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    Cited by:
    1. John E. Tilton, 2012. "The Terms Of Trade Debate and the Policy Implications for Primary Product Producers," Working Papers 2012-11, Colorado School of Mines, Division of Economics and Business.
    2. John E. Tilton, 2013. "Cyclical and Secular Determinants of Productivity in the Copper, Aluminum, Iron Ore, and Coal Industries," Working Papers 2013-11, Colorado School of Mines, Division of Economics and Business.

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