Peace between management and workers at the world’s largest copper mine appears to imminent as the 25-day strike at Escondida copper mine in Chile appears to be all but over.
A union spokesman told news agencies he was optimistic that workers would vote in favour of a new 40 month contract that would give workers a 5% wage increase and a bonus worth roughly US$17,000. That compares with the union’s original demand of a 13% pay hike and a US$30,000 special bonus.
BHP Billiton (BHP-N, BLT-L) is the largest stakeholder in Escondida. Rio Tinto (RTP-N, RIO-L) is also a stakeholder in the mine.
If the new deal is approved, workers could be back on the job this Saturday, with full production being resumed at the mine in another week. The mine normally puts out roughly 3,500 tonnes of copper a day.
The strike had resulted in production at the mine being halved, and BHP had to declare force majeure on copper concentrate shipments.
It’s estimated that the strike was costing the company US$16 million in profit a day as workers demanded to be given a bigger stake of massive profits the mine began to take in with the surge in the price of copper.
News of a possible settlement sent copper contracts for three month delivery down $50 or 0.7% to $7,400 a tonne on the London Metal Exchange.
The deal is being closely watched by other company’s in Chile as it is expected to set the benchmark for future wage negotiations.
BHP could yet have another strike on its hands if it can’t come to an agreement with workers at its Spence mine in Chile by September 12.
State-owned Codelco, the world’s biggest copper producer, has to negotiate contracts at its Andina and Chuquicamata mines later this year.
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