A new collective contract was signed on the afternoon of Friday August 17 between the company and Union No 1 representing around 2,500 Escondida mine workers, BHP said in a statement on Friday. The miner declined to provide details of the agreement.
“We would like to express our thanks for the efforts of all those who have made this agreement possible. An agreement which satisfies both the workers and their families and the need for Escondida to be sustainable over time,” said Patricio Vilaplana, vice president of corporate affairs at Minera Escondida, which is majority-owned and operated by BHP.
The latest deal comes alongside a series of other labor agreements being signed by copper mining companies and unions, dramatically reducing large-scale supply risks expected for this year.
Three-month copper prices on the London Metal Exchange hit a five-year high of $7,348 per tonne in June, when pre-emptive talks at Escondida failed.
Since then, several other mines have come to agreements with unions, including Japanese-owned Chilean mine Caserones last week.
The LME copper price was recently at $6,012 per tonne at 12:20pm London time on Monday, up $78 from Friday’s close.
Workers at Escondida had threatened a minimum 30-day strike but received a new contract proposal from the company last week to extend the government-led mediation. A strike had been called for early August mainly over the issue of benefits and the size of a bonus.
The union was seeking bonuses of $43,000 per person, while the company offered $27,000. After workers rejected Escondida’s final offer, Chilean law dictates government-mediated talks must take place over five days before the union can start a legal strike.
The absence of strikes at major copper mines could imply a stable supply of copper concentrates.
Copper concentrate treatment and refining charges (TC/RCs) were largely unchanged in early August, with threats of Chinese tariffs on US imports the focus of the market. The Metal Bulletin TC/RC index firmed by $0.50 per tonne/0.05 cents per lb to $83.50/8.35 cents in mid-August, with little trade reported.
Workers will not strike at Escondida, the world’s largest copper mine, after an agreement was sealed between the union and operator BHP late last week.