BHP's Escondida copper mine in Chile is the world's largest copper mine. The union of the copper mine issued a statement on Thursday stating that workers in Escondida have refused a new collective labor contract. This lays the groundwork for future strikes.
A total of 2371 workers (approximately 99.75% of union members) voted in support of the strike this time. The Escondida copper mine union stated in a statement that the strike call "received overwhelming support from partners" who believe that the new contract "did not make reasonable progress in achieving worker goals".
The Escondida copper mine union criticized that the new contract not only extends working hours but also reduces benefits. The union reiterated their demand to the company management to evenly distribute the 1% dividend to the workers.
At present, the negotiation process will enter the final stage of mediation. According to Chilean law, either party can now request the government to mediate for a period of five days, and if both parties agree, an additional five days can be extended to avoid a strike.
BHP stated in a statement that it will request government mediation in the coming days and hopes to reach an agreement that meets the wishes of workers and the sustainability of Escondida's future.
The Escondida copper mine is owned by multiple globally renowned mining companies, with BHP holding over half of the shares.
Currently, global copper traders, investors, and other copper producers are closely monitoring the labor negotiations in Escondida. The annual copper production of this mine exceeds 1 million tons, accounting for about 5% of the global copper mining total, making it the world's largest single copper supplier.
The current labor negotiations come at a time when global copper concentrate supply is tight, despite the abundant supply in the downstream refined copper market.
Due to long bets on copper shortages, the benchmark copper futures prices on the London Metal Exchange soared to record levels in May, but since then, copper prices have fallen by about 19%.
BHP has been embroiled in multiple labor disputes. In 2017, over 2300 union members participated in a 44 day strike at the Escondida copper mine, which affected production and pushed up global copper prices.