Bhp strike news26 Jul 2018 08:58
BHP makes final pay offer to workers at Escondida
Workers look down at BHP's Escondida mine. © Reuters
July 25, 2018 9:20 am by Neil Hume
The price of copper edged higher on Wednesday after BHP Billiton, the world’s biggest miner, presented its final wage offer to workers as its giant Escondida copper mine in Chile.
The Anglo-Australian group is offering miners a signing on bonus of $27,000, up from an earlier offer of $23,000, plus a 1.5 per cent salary raise.
This falls short of the bonus up to $43,000 and 5 per cent increase demanded by the union for an estimated 2,500 workers at Escondida.
Last year, failure to reach a deal lead to a 44-day strike at the mine that rattled the global market.
Escondida supplies around 5 per cent of annual copper production and another industrial action could help put a floor under the copper price, which has slumped over the past six weeks to around $6,300 a tonne.
The union now has five days to ballot its members who will either approve or reject the offer.
If they opt for the latter, this will trigger five days of government mandated mediation than can be extended by another five days.
If there is still no agreement the union can call strike action.
BHP has spent heavily to ensure that Escondida can consistently produce more than 1.2bn tonnes of copper a year even though it is mining lower ore grade.
It has done this by investing more than $7bn in new processing capacity. Management wants to ensure it can make a good return on the investment by keeping costs under control.
Copper for delivery in three months on the London Metal Exchange was up $14 at $6,276 a tonne on Wednesday.
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