BHP Escondida Copper Mine Strike Sees Workers Demand Cut Of Dividends
The strike at BHP‘s (NYSE: BHP) Escondida copper mine in Chile, the world’s largest, entered its third day as the powerful workers’ union rejected the company’s request to pause the action and resume negotiations.
The strike, which began on Tuesday after contract talks collapsed, threatens to impact global copper prices and Chile’s GDP if a swift resolution is not reached.
On Wednesday, BHP and the union held a preliminary meeting in an attempt to bridge the gap between their positions. However, the company’s suggestion to temporarily suspend the strike until 8 p.m. to restart formal talks was rebuffed by the union. The labor group accused BHP of “anti-union” practices, citing worker replacements and imposing strict conditions for negotiations.
The strike has effectively shut down the Los Colorados concentration and electrowinning plants, according to union statements. BHP maintains that the mine continues to operate under a contingency plan, with non-unionized workers and contractors still on the job.
The Sindicato Nro. 1, representing about 2,400 workers (61% of Escondida’s workforce), has a history of tough negotiations and successful strikes. In 2017, a 44-day strike at Escondida caused global copper prices to spike and forced BHP to declare force majeure.
Key union demands include a share of 1% of shareholder dividends, estimated at around $35,000 per worker. BHP has countered with a bonus offer of $28,900.
As the standoff continues, some workers have begun setting up an encampment at Puerto Coloso in Antofagasta, where BHP’s exclusive port and desalination plants are located.
Analysts estimate that a prolonged strike could cost BHP between $25 million and $30 million daily. While copper prices have remained stable so far, market observers warn that a protracted dispute could lead to significant price volatility in the coming weeks.
Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
