{"id":6712,"date":"2024-08-15T15:14:25","date_gmt":"2024-08-15T15:14:25","guid":{"rendered":"https:\/\/dailywashingtoninsider.com\/index.php\/2024\/08\/15\/bhp-activates-contingency-plan-as-workers-strike-at-escondida-copper-mine\/"},"modified":"2024-08-15T15:14:25","modified_gmt":"2024-08-15T15:14:25","slug":"bhp-activates-contingency-plan-as-workers-strike-at-escondida-copper-mine","status":"publish","type":"post","link":"https:\/\/dailywashingtoninsider.com\/index.php\/2024\/08\/15\/bhp-activates-contingency-plan-as-workers-strike-at-escondida-copper-mine\/","title":{"rendered":"BHP Activates Contingency Plan as Workers Strike at Escondida Copper Mine"},"content":{"rendered":"

Commodities giant BHP (ASX:BHP,LSE:BHP,NYSE:BHP) has begun removing workers who went on strike at its Chile-based Escondida copper mine, the largest copper operation in the world. <\/strong><\/p>\n

According to Reuters, Union No. 1 declared the strike after negotiations on a new labor contract collapsed.<\/p>\n

The union, which represents around 2,400 workers, rejected BHP’s latest offer. The company had proposed a signing bonus of US$28,900 per worker, but the union had asked for 1 percent of shareholder dividends for the mine. <\/p>\n

The news outlet says that would equate to about US$36,000 per worker. The union’s demand comes after a period of high copper prices, which have bolstered the profitability of mining operations globally.<\/p>\n<\/p>\n

BHP said it has activated a contingency plan in response to the strike, a standard measure in such situations. This plan allows the company to maintain ‘minimum services’ at the mine using non-union employees. <\/p>\n

Union No. 1 is open to further negotiations, but has accused BHP of violating strike terms by replacing striking workers.<\/p>\n

The company has not specified how much production will be affected by the strike. Escondida, which produced 1.1 million metric tons of copper last year, accounts for approximately 5 percent of the world’s total copper output. It processes about 400,000 metric tons of ore daily, making it a critical source of copper for smelters, particularly in China.<\/p>\n

Analysts are closely monitoring the situation, noting that while the immediate impact on the copper market has been muted, a prolonged strike could disrupt global supply chains.<\/p>\n

Workers at Lundin Mining’s (TSX:LUN,OTC Pink:LUNMF) Caserones copper mine in Chile initiated a similar strike over failed wage negotiations on Tuesday (August 13). Lundin and BHP recently made a joint bid to acquire Filo (TSX:FIL,OTCQX:FLMMF) for C$4.5 billion. The two companies plan to form a 50\/50 venture that will include the Filo del Sol project, which is owned by Filo, as well as Lundin’s Josemaria project, situated near the Chilean border.<\/p>\n

BHP, which shares ownership of Escondida with Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) and Japan’s JECO, has been engaged in negotiations with Union No. 1 for several months. The company has defended its latest offer as one of the most competitive in the industry and expressed disappointment over the breakdown in talks.<\/p>\n

The mine’s output is critical not only to BHP’s bottom line, but also to the global copper market.<\/p>\n

As the strike continues, both sides are under pressure to reach a deal that will allow full production to resume.<\/p>\n

During 2017, a labor dispute at Escondida resulted in a 44 day work stoppage. That strike severely impacted copper production at the mine and contributed to a rise in global copper prices.<\/p>\n

<\/span>Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n

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