BHP, workers at Escondida mine in Chile ‘far from agreement’

The Escondida copper mine is the world’s largest. (Reuters pic)

ANTOFAGASTA: Negotiations between workers and BHP Billiton Plc at the Escondida copper mine in Chile, the world’s largest, are “far from reaching agreement” with less than three weeks to go before the negotiation deadline, a union official told Reuters on Thursday.

The official, Carlos Allendes, said the union was preparing a US$400,000 (RM1.6 million) emergency fund to support workers if they opt to strike after the company offers its final proposal on July 24.

He condemned the Anglo-Australian miner for exhibiting “the same stubbornness” that last year led to a 44-day strike that jolted the global copper market.

Allendes said that despite BHP’s setting up a negotiating table in mid-June, conversation with its managers had been “scarce.”

“We have not been able to reach any agreements,” he said. “Our positions are very far apart, there is much distance between us. The company has made no concessions. It makes it hard to negotiate.”

Escondida’s vice president for corporate affairs, Patricio Vilaplana, told reporters on Thursday that the company was “calm” about the negotiations and said the union had shown “good faith” at the negotiating table.

“We hope that continues going forward,” Vilaplana said.

Copper prices have dropped for nine consecutive days, amid fears of a trade war between the United States and China. Allendes said, however, that the depressed price would not weaken the union’s demands, describing the decline as purely transitory.

Escondida’s costs are just over one third of the current price of the raw material, he added, and the mine made a US$483 million (RM1.953 billion) profit in the first quarter of this year compared to a loss of US$184 million (RM744 million) the previous year because of the strike.

“They cannot keep pretending that workers should have no right to a share of those millions of profits,” he said.

The union is seeking a 4% share of the mine’s profits through a 5% increase in salaries and a bonus of between 22 million pesos and 24 million pesos (RM136,000 to RM148,000) per worker.

Vilaplana said the bonus sought by workers was “outside of what the industry has been paying.”