BHP braces for strike at Chilean copper mines

Unionized workers at BHP’s (ASX, LON, NYSE: BHP) Escondida and Spence copper mines in Chile are set to vote on a strike after contract negotiations hit a dead end, the group said in a statement.

The 205 workers run the company’s Integrated Operations Centre (IOC), based in the country’s capital Santiago, from where they manage pits, as well as cathode and concentrator plants in Chile’s north.

When IOC was created in 2019, BHP fired dozens of workers in charge of control rooms to later rehire them with lower conditions and benefits, the union says.

In April, those employees began negotiating with BHP to improve current working terms. Those talks are currently stalled.

Should workers vote in favour of a strike at Spence and Escondida — the world’s largest copper mine —, Chilean labour laws require the two parties to undergo government-led mediation for five to 10 days.

BHP could use a legal loophole that lets it replace striking workers, which would allow it to keep operations running smoothly.

Chilean copper mines have been able to maintain output during the pandemic by delaying non-essential activities and reducing on-site staffing. That’s spurred concern by unions over job security, which may work in favour of companies in current and upcoming wage talks.

Copper prices hit fresh all-time highs on Monday both in London and Shanghai powered by surging demand and a global supply deficit. 

Copper futures on the London Metals Exchange hit $10,747.50 in overnight trading Monday, extending their year-to-date gain to around 40%, as investors bet on a faster post-COVID recovery for the global economy powered by construction and low-carbon project developments. Copper futures on the Shanghai market, in turn, passed the $12,000 mark Monday amid tightening supplies in the world’s biggest market.

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