March 30, 2017 / 2:56 PM / 3 years ago

Escondida shadow looms over other Chile mine talks

SANTIAGO (Reuters) - The failure of BHP Billiton and workers at its Escondida mine to agree on a wage deal after a long and bitter strike has stoked some concerns over the possible fate of other key contract talks at copper mines in Chile over the next year.

FILE PHOTO: Workers of BHP Billiton's Escondida, the world's biggest copper mine, are seen in front of the open pit, in Antofagasta, northern Chile March 31, 2008. REUTERS/Ivan Alvarado/File Photo

As global mining executives gather in Santiago for the annual CRU World Copper Conference that begins on April 3, labor relations will be a major topic of discussion.

Some companies and union officials were hopeful, telling Reuters that the strike at Escondida will not necessarily trigger a wave of industrial action elsewhere at BHP, the world’s top copper exporter.

Last week, the union at Escondida ended a historic 43-day strike by temporarily extending its old contract, a result seen as negative for BHP.

Workers at Peru’s important Cerro Verde have also been on strike.

Meanwhile, a cluster of other mines responsible for a combined 6 percent of global copper output are due to negotiate wage deals in Chile. Contract talks are scheduled this year, including at Anglo American Plc and Glencore Plc’s Collahuasi and Antofagasta’s Zaldivar. In both cases, the two sides are already trying to find common ground.

“Collahuasi and its union leaders meet habitually to talk about items of mutual interest, looking for the best option for the company and its workers,” Collahuasi spokeswoman Bernardita Fernandez said.

Antofagasta, meanwhile, said it had preemptively agreed with the Zaldivar union to a definition of the activities that can continue at the mine in case of a union strike.

Both unions told Reuters last month that they had solid relationships with their companies.

Their talks will likely take a different tack to Escondida’s, industry experts say.

“Escondida has unique conditions that evidently do not apply to other mines, starting with the fact that it is twice as big,” said a copper trader. It also has an unusually powerful union.

And some of the company provisions that upset the Escondida union will no longer be up for negotiation. This Saturday, a complex and wide-ranging new labor reform that strengthens the hand of unions, passed last year by Chile’s center-left government, goes into effect.

Nonetheless, the tense talks at Escondida could have a spillover effect, said the head of Zaldivar’s main union, Raul Torres.

“We’re close to the union leaders at Escondida, and we keep up with what happens there,” said Torres.

For a graphic on Chile's wage contracts, click here

Editing by Rosalba O'Brien and Bernadette Baum

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