World's biggest copper mine in Chile agrees to strike

09:31 | 03/08/2018

Workers at the world's biggest copper mine, Chile's Escondida open-pit, voted on Thursday (Aug 2) in favour of strike action after rejecting as insufficient a salary hike proposed by Anglo-Australian owners BHP.

worlds biggest copper mine in chile agrees to strike
The Escondida mine in Chile is the world's biggest copper producer. (Photo: AFP/Martin Bernetti)

The N1 union said 84 per cent of its members had backed the strike, with a "historic" turnout of 2,330 of 2,500 people eligible to vote.

"We hope that this overwhelming desire to reject the company's offer ... will convince the company of the need to show a willingness to build an accord that recognizes our rights," N1 said in a statement.

The union is calling for a five percent salary increase and a conflict termination bonus of four percent of dividends received by shareholders last year, or about US$34,000 per worker.

Chilean miners earn between US$2,500-3,000 a month - a comfortable sum in a country where the minimum wage is US$800. But the workers argue they deserve such a premium because of their harsh working conditions.

"A strike at Escondida would have very negative effects on our workers and their families, as well as the company, the region and the country," the vice president of the BHP unit running the mine, Patricio Vilaplana, said in a statement.

"We all lose in a strike," he warned.

Vilaplana said the company was reviewing "contingency plans" to minimise the effect of a strike.

- Mediation snubbed -

The company had increased its initial offer of 13.5 million Chilean pesos to 15 million (US$23,000) per worker as a bonus for ending the negotiations, which had dragged on for weeks.

BHP - a multinational mining, metals and petroleum company that posted revenues of US$38 billion and US$5.9 billion in bottom line profit last year - has the right to request mediation, which could last 10 days.

But the head of the N1 union, Patricio Tapia, said the mining company had until next Monday to make concessions, or "we will conclude that it makes no sense to go to heel-dragging compulsory mediation."

Last year, Escondida miners went on strike for 44 days, provoking a 39 per cent drop in production over the first half of the year - costing the company US$740 million.

Some five per cent of the world's copper is produced at the mine, one of the most profitable in the world.

It earned almost US$1.2 billion last year, a 20 per cent increase on the previous year, and that despite the lengthy industrial action.

That hurt the local economy, though, in a country that produces almost a third of the world's copper, around 5.6 million tonnes, fuelled largely by China's insatiable appetite for the red metal.

GOVERNMENT PLEAS

The Chilean government, which says last year's stoppage shaved 1.3 per cent off the economy, pleaded with the miners to reconsider their threatened action.

"We are asking that they take into consideration the reality in this country, where employment is needed," Mining Minister Baldo Prokurica said.

On Wednesday, Finance Minister Felipe Larrain said: "Strike action is a legitimate tool, but without a doubt we hope the problems can be resolved without resorting to a strike."

The Escondida mine is located in the world's driest desert, the Atacama in northern Chile, at an altitude of more than 3,000 metres (10,000 feet).

It's the same area where eight years ago, 33 men were trapped 700 metres underground for 69 days following a cave-in at the Copiapo mine.

Earlier this week, at yet another mine in Chuquicamata, run by the state-owned Codelco company, workers briefly went on strike to demand the reinstatement of sacked colleagues.

Analyst Juan Carlos Guajardo told AFP there was a possibility the mine's workers might not go on strike and instead use legal manoeuvres to roll over their current contract another 18 months.

"That could generate even worse labour relations with the company," he said.

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