By AFP and Alicia Gutiérrez | 2024-09-17

TALCAHUANO, Chile -- It is the end of an era: after 74 years, Chile's largest steelmaker on September 16 shut down its furnace, snuffing out thousands of jobs at Huachipato.

"It was a symbolic and fitting end to an era in Chilean steel history, and a testament to the resilience of our workers who never gave up," said Jean Paul Sauré, general manager of Huachipato, as he confirmed the shutdown of Blast Furnace 2, where non-recycled steel production began in the mill.

Chile's largest steelmaker shut down its furnace at 2.30am local time, according to Union 2 president Fernando Orellana, who told AFP, "This is a dark and sad day for all Huachipato workers."

The iconic company endured political and economic crises, along with natural disasters like the earthquake of February 2010.

However, it could not withstand the relentless pressure of unfair competition from Chinese steel, which ultimately led to the plant's closure. This left thousands unemployed and marked the end of an era for the national steel industry.

Local hub for 3 generations

For generations, life in Talcahuano, a city of 160,000 inhabitants about 500km south of Santiago, has revolved around the Huachipato steel mill.

"I worked in Huachipato, my father worked in Huachipato, my wife was also a Huachipato employee and we had a good standard of living," 62-year-old Orellana, who started as a cleaner at the age of 25 and worked his way up to section chief, told AFP.

For Orellana, Huachipato was the guarantee of a safe pension.

"It was a company that gave you security for the future," he lamented.

In August, Compania Siderurgica Huachipato, once one of Latin America's biggest steel producers, announced it was winding down the business, with the loss of 2,700 direct jobs.

At its peak in 1997, Huachipato produced one million tons of steel.

But in recent years it and other Latin American producers have been blindsided by a flood of cheaper Chinese imports.

In 2023, Latin America imported a record 10 million tons of Chinese steel -- up 44% in a year, according to the Latin American Steel Association (Alacero).

Two decades ago, the figure was just 85,000 tons.

Gerdau, one of Brazil's largest steel producers, last year laid off 700 workers and shut down operations at three plants because of what it called the "challenging scenario faced by the Brazilian market in the face of predatory import conditions of Chinese steel."

First-division football club

In Talcahuano, steelmaking was more than just a job; it was part of the city's DNA.

Founded in 1950, Huachipato specialized in the production of steel bars and balls used in the milling of copper -- of which Chile is the world's largest producer.

The plant gave birth to the Huachipato first division football side, the current leaders of the Chilean championship.

Huachipato played a premier social role in the city, building thousands of houses for the workers and setting up several social and cultural associations.

And during the COVID-19 pandemic, when world trade was interrupted, "it was Huachipato that kept the country's steel supply" afloat, Chilean Economy Minister Nicolas Grau boasted earlier this year.

But which Chinese steel selling as much as 40% cheaper than domestic steel, Huachipato had been on life support for several years.

To revive its fortunes, it joined other Latin American producers in lobbying for anti-"dumping" tariffs on Chinese imports.

But the levies imposed by Chile's Anti-Distortion Commission in April came too late.

With accumulated losses of $700 million since 2019, the company announced in August it would wind down its steelmaking operations.

In a statement, company president Julio Bertrand said that management had done "everything in our power" to save the foundry.

'Entire lives'

The plant's unions negotiated a redundancy deal on the eve of the shutdown. It includes a 30% increment on the statutory payout for staff, along with other benefits.

That is small comfort to the workers, who have few illusions about their futures.

"These are people who have spent their entire lives here, working. They don't know how to do anything else," Hugo Mendoza, a 58-year-old mechanic at the plant, told AFP.

"It's terrible to be left with no work from one day to the next," said Roberto Hernandez, a 54-year-old assembler, who works for one of Huachipato's subcontractors and is not covered by the redundancy plan.

"Where am I going to get work at my age?" he asked.

A study by the regional Universidad Catolica de la Santisima Concepcion estimated that the plant's closure would affect 1,090 small and medium-sized companies, affecting the livelihoods of some 20,000 workers.