Workers at BHP’s (ASX:BHP) Escondida Copper Mine in Chile have walked off the job after failing to successfully conclude wage negotiations.
Despite government intervention, BHP and the union were unable to reach a pay agreement, even after the mining giant tabled a revised offer that included a $28,900 bonus for each worker.
The union’s 2,400 members have now gone on strike, which follows close on the heels of industrial action by workers at Toronto-headquartered Lundin Mining’s (TSX:LUN) Caserone Copper-Molybdenum Mine in Chile.
Escondida – which is a joint venture between BHP (57.5%), Rio Tinto (ASX:RIO) (30%) and Japan’s JECO Corp (12.5%) – is the largest copper producer in the world, contributing about 1 million tonnes annually, or 5%, of global supply.
Goldman Sachs predicts that if the strike were to last 10 days it could wipe upwards of $250 million off BHP’s earnings and if it continued for the same duration as the prior strike in 2017, which lasted 44 days, it could put a $795 million dent in earnings before interest, taxes, depreciation and amortisation.
The 2017 strike was the longest private-sector mining strike in Chile’s history and impacted production and copper prices.
The price of 3-month copper on the London Metal Exchange closed down 0.75% to US$8,958.50 per tonne yesterday (13 August).
BHP reported in July that Escondida reached its highest production in four years for the 2024 financial year, with output reaching 1.13 million tonnes – a 7% increase of the prior financial year.
The miner forecast production for the 2025 financial year to come in at between 1.18 million and 1.3 million tonnes.
Write to Angela East at Mining.com.au
Images: BHP
