A powerful workers’ union at BHP’s Escondida mine in Chile, which accounted for nearly 5% of global copper production in 2023, has launched a strike that threatens to disrupt operations at the world’s largest copper mine. The union, known for its history of hard bargaining, is pushing for a larger share of the mine’s profits.
The strike began on Tuesday, and analysts are closely watching the situation as it has the potential to significantly impact global copper prices. In previous strikes at Escondida, the union’s actions have led to production halts and forced BHP to declare “force majeure,” meaning the company couldn’t fulfill its contracts, causing copper prices to spike.
Andres Gonzalez, head of Plusmining consultancy in Santiago, noted that Escondida’s union is particularly powerful due to its size, financial reserves, and Chilean laws that prevent the company from replacing striking workers. The union represents about 2,400 workers, making up 61% of Escondida’s workforce, and it controls nearly all of the mine’s frontline workers, including machine operators, technicians, and maintenance staff.
The union, led by Patricio Tapia, is seeking a 1% share of shareholder dividends, estimated to be around $35,000 per worker. In 2021, the union negotiated a deal that included a bonus of approximately $23,000 and nearly $4,000 in overtime pay. BHP has offered a bonus of $28,900 in the current negotiations, but the union has rejected the company’s latest invitation to resume talks.
Despite the strike, copper prices have remained relatively stable so far, partly due to weak demand from China, the world’s largest copper consumer. However, analysts warn that prolonged strike action could lead to significant price increases if the dispute is not resolved quickly.
BHP has implemented a contingency plan that involves allowing non-unionized workers to continue working, but the extent of the impact on production remains unclear. As the strike unfolds, the global copper market is bracing for potential disruptions that could ripple across industries reliant on the metal.
