Five days of government-ordered negotiations
SANTIAGO (Reuters) — The main union at BHP Billiton Plc's Escondida copper mine, the world's largest, will probably go on strike as negotiations mediated by the Chilean government are not progressing well, a spokesman said on Tuesday.
Workers warn that a strike at the Chilean mine would nearly halt production and could be lengthy, potentially affecting global supplies of a metal used in everything from construction to telecommunications.
Copper prices have spiked in recent weeks due to strike fears at Escondida, which produced 6 per cent of the world's supply in 2015. One tonne of copper was trading at $5,802.50 at 1:45 p.m. local time, up from a morning low of $5,786.
"Three days of government mediation, and we haven't arrived at any agreement," union spokesman Carlos Allendes said. "It's likely that on (Thursday) the ninth, we'll have to make the strike effective on the ground, so we already have that prepared."
A strike would reduce production at the mine to "practically zero," Allendes added.
The two sides on Friday started a five-day government-mediated period of negotiations that effectively delays a work stoppage the Escondida Union No. 1 voted for last week. As no talks took place on Sunday, Wednesday will be the last day of the negotiations, which the union is legally required to attend, unless both parties agree to an extension.
In a news release late on Monday, the union said BHP had not committed to a benefits scheme that places new and longtime workers on equal footing. The union, which considers equality of benefits key to any agreement, added that it tried to discuss the issue with the company, which asked to put it off to the end of negotiations.
BHP Billiton did not respond to requests for comment.
Labour negotiations at Escondida are seen as a benchmark for the industry at large. The last wage talks four years ago, when copper prices were considerably higher, ended with Escondida offering each worker a bonus worth some $49,000, the highest ever offered in Chile's mining industry.
Falling profits at Chile's copper mines due to lower prices of the metal, however, have caused belt-tightening that makes labour negotiations trickier. Labour problems at Escondida could portend tough negotiations this year at other Chilean copper mines, such as Anglo American and Glencore's Collahuasi and Antofagasta's Los Pelambres.
Escondida is majority-controlled by BHP, with Rio Tinto and Japan's JECO also holding stakes.
