Giorgio Grappi and Brett Neilson
Extracted from hard rocks and mountains, copper is a tradable metal that occupies a place on the fourth row of the periodic table. Known for its capacity to conduct electricity, the element has become an indispensable component in the manufacture of computing hardware and other electronic equipment essential to logistical operations and today’s capitalism. Our effort is to situate copper in its contemporary conduits of production and circulation, and, in particular within the patterns of mining, refinement, transportation and stockpiling that link its extraction in Chile – the world’s primary copper producing country – to its storage and uses in China – the world’s largest copper importing nation. We trace how the production and circulation of copper has mutated with shifting logistical arrangements that respond to the geopolitical position of China, the financialization of trade in base metals, the rise of business models based in data extraction and workers’ struggles in times of labour precarization. On this basis, we ask what type of politics logistical practices related to the contemporary copper industry embody.
In investigating these political dimensions of logistics, our inquiry aims to be more than a work of commodity chain analysis. Our observations and theoretical speculations stem from limited empirical research conducted in the port of Valparaíso, the Andina mine run by Chile’s state owned copper mining company CODELCO and the copper smelter run by the same company on the coast at Ventanas. While we share with commodity chain analysts a concern with the exercise of power in production processes, our interest is more specifically in the role of logistical operations in the coordination and execution of these processes. In particular, our concern is with the relevance of logistical operations in a situation where scenarios of financialization affect the industry’s trajectories in ways that make transactions occurring at specific links along the chain no longer the primary determinants of the commodity’s value. Futures trading and stockpiling have become no less important in setting the price of copper than value adding practices along different links of the commodity chain itself. To distinguish our analysis from the commodity chain approach, we thus use the term line of copper. The word line is not meant to limit us to a two dimensional topology or to exclude the analysis of other topographical and spatial features associated with copper production, such as the use of zoning technologies. Indeed, the term carries the meaning of both a threshold and a connecting logic.
The history of copper mining in Chile places emphasis on the dynamics of extraction and their relation to class formation and state strategies of making capitalist modernity. Current Latin American debates concerning ‘developmentalist neo-extractivism’ extend these concerns. The discussion, however, has been surprisingly inattentive to the continuities and disruptions that link resource extraction to the data extraction that animates activities in the financial and logistical spheres. Reading the history of Chilean copper production through the lens of logistics brings into focus the relation between economic practices and political form, emphasizing the role of the state before, during and after the extraordinary experiment in neoliberalization conducted under the Pinochet regime. In particular, the Chilean case shows how the reading of neoliberalization as state withdrawal from the orchestration of society and markets does not apply as the nationalization of the copper industry (began by Allende and continued under Pinochet, who also opened concessions to multinational corporations) was coincident with its logistical organization. At the same time, logistical modes of coordination crept into state logics and actions, subjecting them to economic rationales and technocratic imperatives. Although these rationales and imperatives were in many ways depoliticizing, they also articulated strongly to a political program of development that abandoned strategies of import-substitution industrialization and looked for growth in export industries. Logistical practices of organization became central to the neoliberal project of securing political legitimacy through economic growth. This meant that state-sponsored extractivist projects became increasingly inseparable from market dynamics in which issues of finance, transportation, coordination across sites and the circulation of information were crucial to ensuring profitability.
Price fluctuation is a concern for the Chilean copper industry. In 1987, the formation of the Copper Compensation Funds, which was later incorporated into the Economic and Social Stabilization Fund, provided a governmental mechanism to smooth out periods of low copper price. Over time, the reasons for price fluctuation have altered. Although supply and demand and currency exchange fluctuations remain important considerations, the trading of copper futures is today an overriding factor. Such trading occurs on three global markets: the London Metal Exchange, the Shanghai Futures Exchange and the Chicago Mercantile Exchange. As in trading of other derivatives, speculative bets on copper prices serve to relocate risk without transaction of the underlying commodity. Dick Bryan and Mike Rafferty explain that in ‘derivative markets prices do not in fact “derive” from the original asset’ but ‘usually run the other way, so that options and futures markets are the places where prices are first formed’. An additional complication involves stockpiling of the metal, both as collateral against futures trade and as ‘dark inventory’ stored, for instance, in bonded warehouses in China’s free trade zones. These practices of speculation and storage have a significant effect on pricing and volatility, meaning that one of the only ways to make up for market uncertainties is to introduce logistical efficiencies on the supply side.
Copper mine, Chile. Photograph by Giorgio Grappi, 2017.
An opinion column published in the national newspaper El Mercurio in March 2017 urges that ‘beyond the fluctuations of copper price, Chile must explore the future scenarios opened by technological transformation and grasp on time the new opportunities’. A sort of logistics revolution for copper presents itself as the only path for Chilean mining, where environmental sustainability, optimization and big data are keys to overcome the present orientation towards rentier extraction. This change requires a national agreement where digitalized governance and performance indicators substitute for the traditional pride of a country ‘married to copper’. Research efforts into ‘smart mining’, seismic modeling and wearable technologies supplement attempts at software optimization of the copper line. Initiatives include the formation of data transmission hubs that transform machines and human bodies into mobile infrastructure for operating an integrated network in the difficult environment of isolated Andean valleys. Left aside in this perspective is labour and, more precisely, the reaction of workers to this projected shift.
For both state and privately owned mines, the fall in copper prices since 2011 has led to rising pressure on companies to increase efficiency. This drive has given rise to an increase in labour disputes. Strikes along copper supply line, especially in mines and ports, have been a salient aspect of Chilean society over the past decade. More recently, mining strikes, particularly around the status of new workers and changes in shifts and benefits, have hurt business confidence in Chilean copper production. These strikes have also boosted investment in automation throughout the industry. With a new labour law adopted in 2017, more favorable to unions than the previous legal framework inherited from the Pinochet regime, companies are looking to logistics to find a way out from tense labour relations. In the meantime, the nature of copper mining has changed: no longer part of a national autonomy strategy, it has become fully enmeshed in global supply chains where extraction goes together with logistical governance and financial performances. Logistics becomes the connecting element between the restructuring of production and the long-lasting dream of Chile as the ‘gateway state’ for the Americas on the Pacific. Valparaíso port, one of the sites of our research, has a role to play in these dynamics and visions, even as its role in copper export is restricted to the shipping of refined product. Indeed, in tracing the line of copper from the Andina mine through to the point of export, we observed an increasingly automated process of valorization and refinement, which begins with the concentration process inside a mountain cavern on the mine site and ends with the production of cathodes in the smelter at Ventanas, some 40 kilometers to Valparaíso’s north.
Part of our study involved research into the role of logistical software in shaping labour relations on Valparaíso’s docks. On a visit to Terminal Cerros de Valparaíso (TCVAL) – a small terminal mostly dedicated to non-containerized cargo including copper ingots and cathodes – we noticed a computer-printed list of workers on shift pasted near the entry gates. Our guides told us that the names corresponded to biometric data held by the company and that the workers had to scan on for each shift with their fingerprints. Research revealed this system to be the so-called nombrada electrónica, which had replaced the traditional labour provisioning system controlled by trade union officials who assigned shifts to workers in hiring halls. Historically, the system involved the possibility for a named worker to pass the right to work to another and to divide wages with them. Although the Pinochet regime eliminated this aspect of la nombrada, the system continued as it proved amenable to private port operators who valued flexibility in labour recruitment.
Until around 2011, la nombrada allowed recruitment of most of Chile’s port labour on a day contract basis. But when grassroots union movements began to use the hiring halls to organize strikes, port operators turned against the system. The introduction of the nombrada electrónica in Valparaíso’s shipping terminals offered a way of maintaining flexibility while wresting control away from unions. In this case, we observed how the introduction of a software system met labour insurgency among precarious workers and shifted the institutional form of labour recruitment. Yet the revitalization of Chile’s labour movement has not been restricted to the port sector and extends to other industries, including copper mining. Beginning in 2007–2009, contract workers had also organized a series of successful strikes against CODELCO. Culminating in 2013 and combining with a resurgent student movement and ongoing Indigenous land rights struggles, the miners’ rebellion resonated strongly with action on the docks, particularly given the central role played by precarious workers.
These affinities were prominent in our analysis the nexus between logistical activities on the docks and the role of software and data analytics in reorganizing the copper line. In these connected instances, the centrality of copper extraction to Chile’s economy has ambivalent implications for the political positioning of labour. It can give workers the opportunity to disrupt a critical industry through strikes and other forms of labour disobedience while also providing a source to discipline workers’ struggles and keep them within the boundaries of an industrial dispute. At the same time, the economic centrality of copper production motivates introduction of logistical technologies that aim to smooth out labour relations by skirting around or minimizing the potential for such disruption.
The investigation of the copper line allows us to discern how extractive operations of logistics and finance generate regimes of labour precarity. More importantly, it points to the emergence of labour struggles that reach across sectors and hierarchies to confront a condition where capital is able to route around disruptions. In such circumstances, insurgency against any specific capitalist actor, if it is to be effective, needs to generate an encounter with the wider assemblages of capitalism that enmesh this actor, without forgetting the global dimension of logistical operations. Struggles in the Chilean mining and port sectors have been inventive in this regard, and importantly have entered into unstable alliance with environmental, student and Indigenous struggles. These patterns of alliance show how political practices forged in the grip of logistical command cross lines that current theory draws and reinforces between a politics of limits that emphasizes the excesses of the human and a politics of overcoming limits that finds possibility in labour or the human capacity to produce. This crossing of lines suggests that the by now widely recognized political dimension of logistics goes far beyond the realm of transport and circulation. Struggles conducted in the face of logistical power introduce new elements of politics with the potential to inspire organizational practices well beyond the limited sector of logistics as usually conceived.