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The union at BHP Group Ltd (NYSE:BHP) Escondida mine in Chile, the largest copper mine globally, has reportedly urged its approximately 2,400 members to reject the company’s final contract offer and prepare for a potential strike.
Union President Patricio Tapia said that workers will cast their votes from Monday to Thursday, reported Reuters.
The union’s stance on the contract offer had not been previously reported. If the workers reject the deal, a strike could commence immediately, the report added.
However, Chilean law allows either party to request five days of government mediation, extendable by another five days if both parties agree.
Tapia mentioned that if the union members strike, the company would be unable to produce copper since replacement workers are not permitted by law.
The union represents 98.5% of frontline operational workers at Escondida. The report further noted that the last significant strike at the mine occurred in 2017, involving more than 2,300 union members for 44 days, which severely impacted production and increased global copper prices.
Also Read: BHP Halts Nickel Mine: ‘We’re Not Able To Overcome Economic Challenges Driven By Oversupply
Tapia stated, “We are much better prepared [for a strike] than before. We have a significant strike logistics fund, four times larger than the one from 2017. And we also have credit agreements to meet the basic needs of workers and their families for a long time.”
For fiscal 2023, BHP reported paying out $8.6 billion in dividends, which would translate to approximately $36,000 for each of Escondida’s 2,390 workers.
Details on BHP’s contract offer include a proposed 20 million Chilean peso ($21,044) bonus per worker. BHP stated that its offer would enhance existing benefits and introduce new ones.
The union is also seeking to improve conditions for workers affected by outsourcing and automation, in addition to enhanced health benefits and bonuses.
The ongoing disputes between the union and BHP have often resulted in work stoppages and complaints about worker safety.
Recently, the company reported copper production of 504.9 Kt (+6% Y/Y), led by growth at Escondida (+6% Y/Y), Copper South Australia (+17% Y/Y), and Antamina (+5% Y/Y).
Investors can gain exposure to the stock via Exchange Traded Concepts Trust Optica Rare Earths & Critical Materials ETF (NYSE:CRIT) and VanEck Natural Resources ETF (NYSE:HAP).
Price Action: BHP shares are trading lower by 1.14% at $54.75 at last check Monday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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