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Chile mining unions threaten action over government bid to block pensions withdrawal

FILE PHOTO: Workers of Codelco's Ventanas copper smelter take part in a protest after Chilean state-owned Codelco revealed it evaluated the closure of the facility in Ventanas

SANTIAGO (Reuters) -Mining unions in Chile have threatened to take protest action if the government does not drop a bid to block Chileans from drawing down more of their pensions savings early, piling pressure on President Sebastian Pinera’s administration.

The Federation of Copper Workers (FTC), which groups the unions of Codelco, the world’s largest copper producer, on Wednesday night told members to be ready to take unspecified action “in support of the just and necessary demands of the Chilean people” to combat economic hardship generated by the coronavirus pandemic.

Union umbrella organization the Mining Workers Coordinator (CTMIN) said it would withdraw from a working group set up with government to address pandemic-related issues, and mobilize its members to discuss action.

Other industrial unions have made similar threats, including port workers who have called for a general strike.

The government has long opposed the Congress-backed raids on the country’s privately-held pensions, the backbone of the free market system and base for its capital markets.

Chilean senators on Thursday greenlighted a move to allow a third pandemic-era drawdown from pensions, which had already been approved by the chamber of deputies. The bill now returns to the chamber of deputies on Friday where lawmakers will either opt to adjust amendments or proceed to a final vote.

Congress already approved two previous withdrawals of 10% from pension pots in July and December, with the help of members of Pinera’s Chile Vamos coalition who defied instructions to vote the initiatives down.

Proponents say it is necessary because the government’s emergency support is patchily distributed and insufficient.

The government argues that a fresh drawdown would increase the number of citizens without pensions from three to five million. It has repeatedly bolstered income replacement payments and loans to hard-hit families to try to head the bill off.

Chile’s central bank said this week that a third withdrawal risked generating “a significant increase in the Chilean economy’s risk profile.”

On Tuesday the government appealed to the country’s constitutional court to block the move, arguing it was unconstitutional since it implied a cost to the public purse that can only determined by the executive.

That could bear fruit, since the court ruled after the approval of the second withdrawal that the move had been unconstitutional.

However, if the government succeeds, it could spark the renewal of fierce social protests which ripped through Chile in October 2019 and simmer to this day.

On Tuesday and Wednesday night, after the government turned to the constitutional court, thousands of Chileans joined pot-banging protests that rang out around the country.

(Reporting by Fabian Cambero and Aislinn Laing, Editing by Rosalba O’Brien)

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