GSE Environmental Inc. will close its plant in Antofagasta, Chile, to cut costs as major mining customers in the region stagger under low world prices for minerals.
Steve Eckhart, GSE vice president of marketing, said in a phone interview that the plant relies on imported resins and that the transportation costs involved make the operation economically unviable. Instead, GSE will supply South America mainly through its Houston plant, where the company is headquartered.
GSE announced the closure Sept. 29. Eckhart said the shutdown will be effective Oct. 31. GSE will maintain sales and customer service functions in Chile. About 35 workers will be affected by the closure. The company has been making a variety of geomembranes there based from high and linear low density polyethylene sheet.
Eckhart said the recent plunge in mineral prices contributed to the cost-cutting decision. World copper prices are currently about $2.30 per pound, well below the all-time high mark of $4.58 in February 2011. Prices reached an all-time low in August 2015 at $2.24 per pound. Chile is a major copper producer and mines there and in other regions have curtailed operations during the market slump. Mining is a major market for geomembranes, which are commonly used to line tailings ponds.
“The decision to close this facility was not made lightly,” noted GSE President and CEO Bob Preston in a news release. “However, we believe this the best way to serve our customers across the Americas by streamlining processes, consolidating manufacturing operations, and reducing costs.”