Listen to this article
A strike looks increasingly likely at Escondida, the world’s biggest copper mine.
BHP, which operates the mine and is the majority shareholder, confirmed on Wednesday that it’s pay offer had been rejected.
In a statement, the Anglo-Australian mining company said:
Over the past four weeks, BHP Billiton held detailed talks with the unions representing workers at Escondida before submitting a final offer that we believe balanced protecting worker’s compensation arrangements, while recognising the future challenges for the copper industry and Escondida.
The Company has been notified by the Labour Authorities with the result of the voting process held by members of Escondida’ s Worker Union N°1. The outcome of this process was a rejection of the Company’s final offer.
As a company, we regret that our proposal was not accepted and, despite the result, we reiterate our desire to maintain an open door, to continue to carry out a process in an atmosphere of respect and dialogue, and to achieve an agreement that allows us to face future challenges together with our workers.
BHP now has 48-hours to request government mediation to attempt a resolution with the disgruntled workers. That option is likely to be triggered but few analysts think it will be successful.
In the last pay-deal four years ago workers received a $49,000 bonus when the copper price was $2,000 a tonne above its current levels. This time they have been offered $12,000
Escondida is expected to produce around 1.1m tonnes of copper this year.
The prospect of a strike has helped push the price of the metal, used in everything from wiring to power grids, close to near $6,000 a tonne.
Analysts at Standard Chartered estimate that 3,400 tonnes of output would be lost for each day of stoppage at Escondida.
Other shareholders in the mine include Rio Tinto and a consortium of Japanese investors.