Germany, Italy import legally dubious Brazilian gold, study shows
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Workers at BHP’s (ASX, LON, NYSE: BHP) Escondida copper mine in Chile downed tools on Tuesday after wage negotiations ended up without an agreement between the parties, despite the government’s mediation.
The strike at the world’s largest copper mine began at 8 a.m. local time on Tuesday and involves the union’s 2,400 members, leaders said in a emailed statement, though no formal announcement has been released yet.
“We’re convinced we made every responsible effort to reach an agreement, but that wasn’t possible,” the union said.
BHP representatives and union leaders sat down on Monday for one last session of mediated talks that extended to the early hours of Tuesday. Before the tense meeting, the Australian mining giant presented an improved wage offer directly to workers and the labour regulator, which included a $28,900 bonus for each worker.
According to BHP, union leaders didn’t show up to scheduled sessions earlier Monday. Workers’ leaders said the company was aware they wouldn’t be attending the earlier discussions, accusing BHP of revealing the terms without prior consultation.
The last significant time Escondida workers downed tools was in 2017 and the strike lasted 44 days. The stoppage hurt production, drove global copper prices up and became the longest private-sector mining strike in Chile’s history.
It’s estimated that Escondida — responsible for about 5% of the world’s total copper output — failed to produce more than 120,000 tonnes of the red metal due to that strike.
Estimations from Goldman Sachs’ indicate that a 10-day strike action could impact BHP’s earnings by upwards of $250 million. This is based on an estimate of $16 million per day and lost production during ramping down and up.
If the strike was to last for 44 days, Goldman estimates the current EBITDA impact would reach $795 million.
Based on data from state-run Chilean Copper Commission (Cochilco), Escondida accounted for 23.7% of the country’s copper production during the first half of the year. This is almost the same amount produced by Chile’s Codelco, the world’s largest copper producer, in the same period.
Escondida churned out 614,400 tonnes of copper in the first six months of 2024, according to Cochilco. Chile’s total production of the red metal during the period amounted to 2.6 million tonnes.
The stoppage at Escondida comes barely a day after 270 workers downed tools at Lundin Mining’s (TSX: LUN) Caserones copper mine.
While majority-owned and operated by BHP, Rio Tinto and Japanese companies such as Mitsubishi Corp also hold stakes in the mine.
Chile is the world’s biggest copper producer, and sales of the metal make up for about 60% its export earnings.
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