A union at the massive Escondida copper mine in Chile is heading into the final day of mediated wage talks after operator BHP Group (ASX: BHP) improved its offer, just as striking workers at an Antofagasta Plc mine return to the negotiating table.
Near-record copper prices are emboldening workers to seek a greater share of mining profits as companies look to contain cost inflation, fueling labor tensions in the top producing country. At the same time, the threat of further disruptions is adding to supply concerns that have helped drive the metal’s rally.
BHP said its latest proposal would reinforce the position of Escondida supervisors and staff as the best-compensated professionals in their segment of the industry. While the union acknowledged the new offer addressed some of its demands, it said significant differences remain.
A proposed signing bonus of roughly $25,500 per worker, as part of a broader benefit package, is “below market” given the company’s windfall profit, said Alexis Barrera, head of Escondida’s No. 2 Supervisors and Staff Union. Copper futures, little changed Tuesday, are up about 35% over the past year.
If the two sides fail to reach an agreement Tuesday, a strike by more than 1,000 members could begin Wednesday. Alternatively, the two sides could agree to extend the mediation process.
Negotiations at the world’s biggest copper mine are unfolding as Antofagasta and striking workers at its Centinela operation resume mediation Tuesday in an effort to end a stoppage that unions say is already curbing mine activity.
Antofagasta said it has “maintained continuity of operations” during the strike, without providing production figures. That contrasts with unions’ claims that mine activity has been curtailed. An average of 25 haul trucks have been operating per shift, compared with a normal level of 67, the unions said, citing operational reports they obtained.
The Centinela dispute centers on differences in pay and benefits between workers performing similar jobs but belonging to different unions. Three workers staging a hunger strike outside Antofagasta’s corporate offices in Santiago have begun showing signs of deteriorating health after five days without food, the unions said ahead of the resumption of talks.
The labor tensions add to a string of mine disruptions and production disappointments that are tightening the copper market. The latest came Sunday, when an avalanche struck Codelco’s El Teniente mine in Chile, compounding concerns over whether supply can keep pace with demand growth from data centers and expanding power grids.
(By James Attwood)
