Workers’ union at Escondida copper mine rejected BHP Billiton’s new wage contract and called for a strike. The workers’ union issued a statement on Saturday claiming that 99.5pc members voted against the contract. A strike at the mine could further restrict global copper supplies and spike prices.
BHP Billiton has requested the Chilean government to mediate in an effort to avoid a strike. If the government intervenes, negotiations will restart and last for 5 to 10 days and in case of no agreement, the strike will begin. BHP is hopeful of reaching an agreement with the union during government mediated negotiations
Citing the shortcoming of the offered wage contract, the workers’ union said they want improved professional development and performance compensation along with a key demand that workers receive a bonus equivalent to 1pc of the dividends paid to investors.
On the other hand, the Chilean government wants to increase taxes and royalties on the mining industry to pay for social programs to ease the impact of the COVID-19 pandemic.
The Escondida copper mine produces almost 5pc of the global copper supply. In 2020, the mine produced 1.185mn mt copper and is expected to produce 940,000mt to 1.030mn mt copper in FY2021. In an event of a strike at the mine, copper prices are expected to spike further, which in turn could support higher copper scrap prices.