Striking Escondida workers vow to prepare for the long haul

Around 2,400 workers of Minera Escondida, the Chilean subsidiary of BHP, started a strike on Tuesday after collective bargaining failed.

Escondida in Antofagasta region is one of the largest copper mines in the world. The talks failed after five days, despite mediation by a state agency that ensures compliance with labor laws.

In a statement, union No. 1, which represents 95% of workers, said negotiations did not lead to "an outcome favorable for the heartfelt and relevant demands of the workers."

Contacted by BNamericas, the union declined to comment, but efforts to resume the partially halted operations are ongoing.

A local employee of Swedish heavy vehicle manufacturer Scania, which offers maintenance and repair services for buses used to transport Escondida personnel, told BNamericas on condition of anonymity that "although the level of assistance has decreased, since workers are not using the buses with the same frequency, we continue to work normally."

According to local media, BHP offered individual bonuses of 27 million pesos (US$29,000), a salary increase of around 4%, a full coverage healthcare plan and other benefits.

But the union wants at least 1% of the dividends the shareholders receive, which would translate into US$36,000 per worker.

Escondida is 57.5% owned by BHP, 30% by Rio Tinto and 12.5% by Japanese consortium Jeco Corp.

“We already experienced a 44-day strike [in 2017] and now we are prepared for 120 days,” a union member shouted in the middle of a protest on Tuesday, according to a video sent to BNamericas.

The 2017 stoppage caused multimillion-dollar losses for BHP and impacted the global copper market, where Escondida represents around 5% of production and operates as a customer of important Chinese smelters, such as China Copper and Daye Nonferrous.

Escondida reported H1 output of 1.13Mt, the highest in four years.

The workers' demands also come after BHP offered to buy Anglo American's copper assets for US$49 billion. Although no agreement was reached, the move led to an alliance with Canada's Lundin Mining to acquire Filo Corp for over US$3bn and form a joint venture to advance key copper projects in Argentina.

Prices are also on the rise. Copper was traded at over US$8,800/t on the London Metal Exchange on Wednesday, with forecasts of breaking through the US$9,300/t barrier by the end of the year.

Australian-listed BHP has a market capitalization of nearly US$133bn and maintains a stable investment profile and attractive prospects, due to strong growth in earnings, revenues, gross and net margins, and optimal debt management, Xuan-Ce Wang, mining consultant at Precious Metal Consulting and Engineering, wrote on social media.