Minera Escondida: The details of the negotiations between the union and the company that are heading to a tense end

While workers called for a “short strike”, the BHP company released a new proposal with improvements, but warned that they will not advance on it as long as the threat of strike persists.

A months-long wage negotiation at the world’s largest copper mine is heading to a tense end in the days ahead.

The main union of mining Escondida, the largest copper deposit in the world, called on its workers to be ready to start a strike, by failing to enter into agreements in the middle of their collective bargaining with the controlling company, BHP.

However, since the signing, they indicated that they have made substantial improvements and promised to continue their practice of not sweetening the offers as long as the threat of strike persists. Even so, the three strikes that occurred in the last fifteen years, in Escondida and Spence, which have lasted for more than forty days, are not mainly characterized by generating important changes. In fact, in 2017 the workers chose to freeze the contract for 18 months, but finally the negotiation that they launched a year and a half later was quite similar to the one offered before starting the strike.

Wage negotiations at a mine that accounts for about 5% of world production are being watched closely by the copper market, as trillions of dollars in government stimulus fuels demand for industrial metals. Therefore, traders will have to navigate Chile’s complex labor rules to determine likely next steps.

After workers rejected BHP’s final salary offer in regular talks, the company exercised its option for a five-day mediation period in a bid to avoid a strike, which ends on Monday. If the two parties cannot reach an agreement by then, they could agree to extend the mediation for up to five more business days or a legal strike could begin.

The two sides don’t seem to be very far apart in terms of benefits. Specifically, the union requested a bonus equivalent to 1% of the company’s profit, which would be about $ 21 million pesos ($ 26,600) for each worker. In regular conversations, the company offered $ 18 million each and says it has sweetened the terms during mediation and they may be further apart on base salaries.

According to consultancy Plusmining, any strike would likely be shorter than the 44-day strike that rocked the copper market in 2017. The union would have the option, as it took four years ago, to end the strike by freezing the current contract for 18 months and go back to trading, without receiving any bonuses now.

But since the company presented an offer above the legal floor, under the new law 20,940, workers could only take that option after 30 days, which would put pressure on their personal finances.

In this way, the union has two strategies: on the one hand, it can accept the offer made by the company, or bet on a strike that will result in at least thirty without pay or benefits.

In this case, the only option left to the union would be to avail itself of the new article 342 of the Labor Code, which would allow it to freeze the current contract for 18 months and then return to bargaining, without receiving any bonus now.

While the union says that BHP has not done enough during the mediation and attached conditions to the proposed benefits, the company is increasing its own pressure to reach an agreement. The cost of a prolonged strike at a time of sky-high copper prices would also be high for the Melbourne-based miner.

“We have done everything possible to reach an agreement during the process, and especially in the mandatory mediation,” the company said in a via statement on Friday. “We hope that these efforts will be appreciated by the workers because the offer in mediation will be the best that the company will present,” said BHP.

Source: Emol