A worker union on strike at BHP’s (ASX:BHP) giant Escondida copper mine in Chile has rejected a request from the company to pause its protest and return to negotiations.
Seeking a larger slice of profits under broader wage discussions, the workers have been dug in since the strike — which could affect production at the mine and even global copper prices — began on Tuesday after negotiations collapsed.
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.
A preliminary meeting between BHP and the union was held on Wednesday in an attempt to find a resolution. However, both sides have said that attempt failed.
“The company suggested to the union the option to pause its strike until 8pm today, to resume talks,” BHP said in a statement yesterday, indicating it was open to boosting its offer.
“The union did not agree to the temporary suspension of the strike.”
In its own statement, the union accused BHP of “anti-union” practices by replacing workers, and of imposing too many conditions on the resumption of negotiations.
“The demands and conditions of the company made it impossible to open talks,” the union said, citing a tight deadline from BHP which did not give enough time to consult its members.
While BHP is continuing to operate the mine under a contingency plan, the union noted that the strike is keeping the Los Colorados concentration and electrowinning plants fully offline.
A few hundred workers began building an encampment at Puerto Coloso — BHP’s exclusive port for shipments, which also houses desalination plants — in the northern city of Antofagasta on Wednesday, according to a witness cited by Reuters.
According to a report by Brazilian investment bank BTG Pactual, BHP could lose between US$25 million ($37.8 million) and US$30 million a day if the strike lasts as long as one in 2017, which went for 44 days.
The global copper sector has been hit by a number of significant disruptions in recent years, including the shutdown late last year of First Quantum Minerals’ (TSX:FM) Cobre Panama copper mine — which accounted for roughly 1% of global supply — in Panama.
Although operations at the mine remain suspended, Toronto-based Barrick Gold (TSX:ABX) says it is open to a partnership role at the mine, should the Panamanian Government decide on a path forward.
“At the end of the day, it is the Panamanian government that has to decide what it wants to do with this asset, and we, of course, stand available to be considered as a potential partner sometime in the future,” CEO Mark Bristow told Reuters.
Still, the disruptions aren’t good for the price of copper, which has been struggling to hang onto its COVID-era gains. Copper is currently sitting at US$8,968.50 ($13,550) per tonne, according to the London Metal Exchange.
Write to Oliver Gray at Mining.com.au
Images: BHP
