August 1, 2018 / 4:07 AM / 2 months ago

Workers at Chile's Escondida give BHP deadline to avoid strike

SANTIAGO (Reuters) - The union at BHP Billiton’s Escondida mine in Chile, the world’s biggest copper mine, told the company on Thursday that it should improve its contract offer by August 6 or it would begin preparations for a strike.

Union workers announced earlier on Thursday that they had voted to reject the company’s final wage offer, issued by the Anglo-Australian miner last week, and had approved a strike.

Last year, a 44-day walk-off at the mine jolted global copper markets and docked economic growth in the South American country, which is the world’s top copper producer.

Chilean labor law allows either party to call for a five-day period of government mediation that can be extended an additional five days ahead of a potential strike.

“The union has taken the decision not to ask for the mediation ... however, we are willing to talk with the company beginning today in order to gauge whether there exists a real willingness to negotiate,” union head Patricio Tapia told reporters.

“If we don’t see a change in attitude on the part of the company by Monday, August 6, we will conclude that it doesn’t make sense to extend the talks,” Tapia added.

BHP said in a statement that the rejected wage offer was the “best collective labor contract at a private mine in the country.”

It said it had begun to review contingency plans ahead of a possible strike.

Chile’s government asked both sides to negotiate.

“I call on them to talk and come together because otherwise this will definitively harm our country,” Finance Minister Felipe Larrain told reporters.

BHP’s final offer was rejected by 84 percent of union workers, an outcome that was widely expected following a partial count of votes earlier this week.

The deal offered by BHP included an approximately $18,000 signing bonus, and a 1.5 percent boost to salaries, with increases for inflation.

But the union had asked for a signing bonus around twice that offered by the company, and had requested a salary increase of 5 percent, leaving a wide gap between the two sides.

Despite the mounting tensions at Escondida, copper hit a two-week low on Thursday as investors focused their attention on the flare-up in a trade dispute between the United States and top metals consumer China.

Escondida produced 925,000 tonnes of copper in 2017.

Reporting by Antonio de la Jara and Dave Sherwood, Editing by Rosalba O'Brien

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