(Adds BHP Billiton's comments)
By Fabian Cambero
ANTOFAGASTA, Chile Feb 7 Workers are set to
strike on Thursday at BHP Billiton Plc's
Escondida copper mine after contract talks mediated by the
Chilean government failed to reach a deal, the main union at the
world's largest copper mine told Reuters.
The union has warned that a strike at the Chilean copper
mine could be lengthy, potentially affecting global supplies of
a metal used in everything from construction to
BHP Billiton said it planned to halt production during the
strike since it could not guarantee the safety of the 80 workers
the government had authorized to remain at the mine to perform
"critical duties", such as equipment upkeep and adherence to
"The company doesn't want to change its position, so we
understand that there is nothing left to negotiate ... there is
nothing left to talk about, we've already talked a lot and we
are definitely going on strike," union spokesman Carlos Allendes
said on Tuesday.
The strike is planned to start at 8 a.m. (1100 GMT) on
"We've decided not to replace workers, at least during the
first 15 days of the strike. With complete conviction, we have
accepted that we will not be producing during this phase because
the safety of our workers cannot be guaranteed during a strike,"
said Patricio Vilaplana, Escondida's vice-president of corporate
Copper prices have spiked in recent weeks over fears
of a strike at Escondida, which produced 6 percent of the
world's supply in 2015. One tonne of copper was trading at
$5,795.00 at 7:18 p.m. local time (1018 GMT), up from a morning
low of $5,786.
The two sides on Friday started a five-day
government-mediated period of negotiations that effectively
delays a work stoppage the Escondida Union No. 1 voted for last
A strike can only legally begin on Thursday since Wednesday
will be the last day of the scheduled negotiations if talks are
not actually held. If there is a sudden change of heart, both
parties can agree to an extension.
Allendes warned that the union has decided not to sit down
to negotiate with the company on Wednesday.
"There will be no talks tomorrow," Allendes said.
In a statement on Monday, the union said BHP had not
committed to a benefits scheme that places new and longtime
workers on equal footing. The union, which considers equality of
benefits essential to any agreement, added that it tried to
discuss the issue with the company, which asked to put it off to
the end of negotiations.
Labor negotiations at Escondida, which have a long history
of being tricky, are seen as a benchmark for the industry at
large. The last wage talks four years ago, when copper prices
were considerably higher, ended with Escondida offering each
worker a bonus worth some $49,000, the highest ever offered in
Chile's mining industry.
Falling profits at Chile's copper mines because of lower
prices of the metal have caused belt-tightening that makes labor
negotiations more difficult. Labor problems at Escondida could
portend tough negotiations this year at other Chilean copper
mines, such as Anglo American and Glencore's
Collahuasi and Antofagasta's Los Pelambres.
Escondida is majority-controlled by BHP, with Rio Tinto
and Japan's JECO also holding stakes.
(Reporting by Fabian Cambero; Additional reporting by Gram
Slattery & Anthony Esposito; Writing by Anthony Esposito & Gram
Slattery; Editing by Grant McCool and Alan Crosby)