Chile: three-day strike called off at world’s largest copper mine

SantiagoWorkers at Escondida, the world’s largest copper mine in northern Chile, announced on Friday the end of a three-day strike after reaching an agreement with Australian multinational BHP for improved working conditions.

“Following the overwhelming acceptance of our members, we have accepted the company’s new proposal,” said the Escondida union No. 1 in a statement.

For its part, BHP reported that it had reached a “consensus on a proposed collective agreement.”

According to the union, the parties reached agreements on retirement, 100 percent coverage of the health plan and improvements in education for workers and their children.

They also demanded that workers receive, in total, an amount equivalent to one percent of the total dividends that the company pays to its shareholders, which translates into about 35 thousand dollars per person in bonuses and loans, the union explained. This central point is “practically achieved,” they said.

BHP previously offered bonuses worth about $28,900, but the 1 percent dividend was closer to $35,000, according to analyst estimates.

If approved, some 2,400 workers will benefit from this arrangement.

Copper prices eased on the news, with the three-month contract on the London Metal Exchange falling 0.2 percent to $9,128 a metric ton. However, the price of the metal, used in energy and construction, posted a weekly gain of three percent, its first in six weeks, as the Escondida strike raised concerns about supply disruptions.

The mine accounts for 5% of global supply

5.4 percent of global copper supply comes from Escondida, which operates in Antofagasta, 1,200 km north of Santiago.

In 2017, Escondida workers went on strike for 44 days, the longest in the history of Chilean mining.

The halt in activities generated losses of 740 million dollars and meant a contraction of nearly 1.3 percent of Chile’s gross domestic product (GDP) that year.

Located in the Atacama Desert, the Escondida mine is 57.5 percent owned by Australia’s BHP. The other shareholders are Australia’s Rio Tinto (30 percent) and Japan’s Jeco (12.5 percent).

In 2023, Escondida extracted 1.1 million tons of copper, equivalent to 5.4 percent of the world supply of the metal (20 million 262 thousand tons).

The private mine accounts for 21 percent of total copper output in Chile, the world’s largest producer of the metal, with almost a quarter of global supply.

Crucial metal in batteries, electric cars and energy transition

Copper and lithium – of which Chile is the world’s second largest producer – are critical metals for the manufacture of batteries and electric cars necessary for the energy transition aimed at tackling climate change.