Workers at Escondida, the world’s largest copper mine in northern Chile, went on strike Tuesday after failing to reach an agreement on a new collective agreement with their employer, Australian giant BHP, their union said.
“Today, the legal strike of the members of the Workers Union No. 1 began due to the impossibility of reaching an agreement with Escondida-BHP,” the union said in a statement.
The Escondida unions, which had approved this call for a strike on 1er August, have long demanded that 1% of the dividends paid to foreign investors in the mine be distributed to workers.
According to local media, BHP offered to pay a bonus of US$28,900 to each worker, but the union estimates that 1% of the dividends is equivalent to US$36,000 per worker.
In its statement, the union said that “the fundamental demands of the workers”, including respect for rest periods, “have not been taken into account by the company”.
BHP said it “regrets” the workers’ decision despite its “repeated efforts throughout the process to present proposals containing substantial improvements to the current collective agreement, which is already one of the best in the industry.”
Located in the Atacama Desert, the Escondida mine is controlled by the Australian BHP at 57.5%. The other shareholders are the Australian Rio Tinto (30%) and the Japanese Jeco (12.5%). In 2023 it produced 1.1 million tonnes of copper, or 5.4% of world production and 21% of that of Chile.
In 2017, Escondida workers held a 44-day strike, the longest in Chilean mining history. The strike caused $740 million in losses and led to a 1.3% contraction in Chile’s gross domestic product (GDP) that year.
“Very long” strike
Currently, the union claims to have “a logistical fund several times larger than that of the 2017 strike,” which will allow it to finance the basic needs of workers and their families “for a very long period.”
In August 2021, workers and the company narrowly avoided a strike by reaching an agreement on a three-year collective agreement – the one that is currently being renegotiated.
Escondida’s workers earn wages well above the national average in Chile, but in line with those charged by Chile’s powerful copper industry, the world’s largest, which generates between 10 and 15 percent of the country’s GDP.
This strike comes against a backdrop of rising global copper prices.
In May, Chile raised its official estimate of the metal’s average annual price for 2024 to $4.30 per physical pound, up from a previous estimate of $3.85.
Copper and lithium – of which Chile is the second largest producer in the world – are essential metals for the manufacture of electric car batteries needed for the energy transition to combat climate change.