The workers at BHP’s Escondida and Spence copper mines in Chile may go on a strike, announced the workers’ union in a statement.
BHP’s Integrated Operation Centre (IOC) consisting of 205 workers managing the pits, cathode and concentrator plants.
BHP fired few workers in 2019 and rehired them at IOC at lower benefits. In April this year, the workers at IOC started negotiations with the company management. However, talks were suspended.
According to local media, BHP could use a legal loophole to replace striking workers to keep the operations running smoothly. If the workers vote in favour of the strike, management and labour unions would undergo government-led mediation for 5-10 days.
BHP’s Escondida and Spence mines account for almost 20pc of annual copper output in Chile. Chilean copper mines kept the output unaffected by avoiding non-essential activities and maintaining minimum staff on-site, which has created concern over job security.
Copper prices hit all-time high on Monday driven by surging demand and a global supply deficit. Copper futures on the LME reached $10,747.70/mt in overnight trading Monday on increased construction activity and low-carbon project developments. Copper futures on the Shanghai market crossed the $12,000-mark on Monday on the back of the tightening supplies in China.
BHP has 57.5pc shares in the Escondida mine located in the Atacama Desert in Northern Chile. In 2020, copper production at Escondida increased by 4pc to 1.18mn mt, supported by a record average concentrator throughput of 371,000mt per day, contrary to the expected grade decline, stoppages associated with the social unrest and COVID-19 pandemic.
BHP recently built a new concentrator plant that can process 95,000mt of raw material per day at Spence mine by spending $2.46bn. Spence mine is expected to hit full capacity by the beginning of the next year and will produce 300,000mt annually until at least 2026.
BHP has operations in Australia and the Americas with sales and marketing through Singapore and Houston, United States. The company has headquarters in Melbourne, Australia.