Strike action at BHP’s (ASX:BHP) Escondida Copper Mine in Chile has been halted after union-represented workers agreed to a revised wage deal.
Last Friday (16 August), the union – which represents 2,400 Escondida workers – and BHP reportedly reached an agreement that will see workers receive a $32,000 bonus and an additional $2,000 in “soft” loans.
A soft loan is financing with no interest or a below-market rate of interest and lenient terms that is often offered in developing countries.
BHP previously offered a $28,900 bonus for each worker, but the union’s demand was for 1% of shareholder dividends paid out from earnings from the Escondida Mine which equates to about $35,000-36,000 per person.
This prompted workers to walk off the job last Tuesday (13 August) and initially also reject a request from BHP to pause the protest and return to negotiations.
“BHP and Union No. 1 have come to an agreement for a collective contract proposal. Along with that, it was agreed to suspend the strike,” Reuters quoted BHP as saying.
Jointly owned by BHP, Rio Tinto (ASX:RIO), and Japan-based JECO Corp, the Escondida mine sits in the Atacama Desert of northern Chile and accounts for roughly 5% of global copper supply.
The mine also accounts for about 3% of Chile’s gross domestic product.
Andres Gonzalez, head of mining analysis at Plusmining consultancy in Santiago, told Reuters the large sums in this negotiation could set a precedent not just for Escondida, but for all of Chile‘s mining industry.
Since the strike began last week, London Metal Exchange copper prices have climbed as much as 2.1% to US$9,148.50 ($13,682) per tonne. They have come back slightly to around US$9,115.50.
Write to Angela East at Mining.com.au
Images: BHP
