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Commodities

Union at BHP's Escondida mine in Chile rejects contract, company seeks talks

Negotiations at the sprawling northern Chile copper mine have been conducted in secret, leaving metals markets on edge.   © Reuters

SANTIAGO (Reuters) -- The union of workers at BHP Group Ltd's Escondida copper mine in Chile, the world's largest, said on Saturday it had voted to reject the company's final labor contract offer, prompting BHP to request government-mediated talks in a last-ditch effort to stave off a strike.

The talks, once confirmed by authorities, will last for 5 to 10 days, according to Chilean labor law. If no agreement is reached, a strike would begin.

The union said in a statement late on Saturday that 99.5% of those who voted had rejected the final contract offer and had approved a strike, suggesting a still wide gap between BHP and its workers despite nearly two months of talks.

Negotiations at the sprawling northern Chile copper mine have been conducted in secret, leaving metals markets on edge. A prolonged strike by the mine's top workers' union would further constrict global supplies of copper and send already high prices even higher.

"We hope that this strong vote will be a decisive wake-up call for BHP to begin substantive talks...if it is to avoid an extensive conflict that could become the costliest in the country's union history," the union statement said.

BHP said in a statement following the union vote that management remained hopeful it could reach a deal with the union during the upcoming government-mediated talks.

"The interest of the company is always in reaching agreements with its workers so we remain open to dialogue and to taking advantage of all opportunities available to it," it said.

The union said in its statement that negotiations had failed to make progress on its main demands, including an improved system of professional development and performance-based compensation. Another key sticking point is a union request that its workers share in 1% of dividends paid to investors.

At Escondida, memories remain fresh of the historic 44-day stoppage in 2017 that jolted global copper markets and slowed Chile's economic growth.

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