The strike at the world's largest copper mine has ceased
Last week, after BHP Billiton and the union reached a compensation agreement, the world's largest copper mine, the Escondida copper mine in Chile, avoided a strike at the last minute.
However, this does not mean that the global copper supply crisis is lifted-on the contrary, BHP Billiton's acquiescence of higher-level welfare agreements than peers may provoke more copper mining workers around the world to join the strike.
BHP Billiton acquiesced to a welfare agreement that was significantly higher than in the past
In the context of the soaring copper price this year, many copper mining unions around the world have expressed the hope to improve workers' treatment. The governments of Chile and Peru, the major copper producing countries, also intend to get a share of this. The contradiction between the two gradually sharpened.
Escondida Copper Mine is located in the Atacama Desert in northern Chile. It is the world's largest copper mine, and its output accounts for almost 5% of the total global copper supply. In July of this year, the Escondida Copper Mines union asked BHP Billiton for a salary increase and welfare benefits, but at first the two sides did not negotiate. After a period of confrontation and negotiation, the two sides reached an agreement on August 12, and the international copper price also fell after that.
According to reports, the content of the agreement reached between BHP Billiton and the labor union includes that each employee will receive about $30,000 in benefits, including a bonus equivalent to 1% of the dividend, which will be distributed to all employees in proportion.
Such welfare conditions are significantly higher than those of its peers. In March of this year, Chilean miner Antofagasta's Los Pelambres copper mine paid US$24,000 to union workers.
Juan Carlos Guajardo, head of the Chilean consulting firm Plusmining, said that due to high copper prices, unions have high expectations for benefits when negotiating. The record-breaking benefits reached in this agreement are equivalent to the company’s "implicit recognition of these higher requirements."
Analysts pointed out that the result of such an agreement may cause other copper mine unions to have higher requirements for welfare benefits, make it more difficult for labor negotiations in other mines to reach a result, and increase the risk of strikes in other copper mines.
More copper mines are facing a strike crisis
Although the strike crisis at the Escondida copper mine is temporarily lifted, many of the current global copper mining giants are still in labor negotiations. These include the El Teniente copper mine, the second largest copper mine under the Chilean Copper Corporation, the smaller El Salvador copper mine, and the Ministro Hales mines), BHP Billiton’s Cerro Colorado (Cerro Colorado), Anglo American’s El Soldado copper mine (El Soldado). And Polish Copper’s Sierra Gorda, etc.
Recently, at the Andina copper mine of the Chilean Copper Corporation, three unions have announced a collective strike. The representative of the local trade union pointed out that in the last year when the new crown epidemic was the worst, the Chilean National Copper Corporation still slightly increased its output, which was inseparable from the efforts of the workers. Therefore, although the influence of Andina Copper Mine is not as great as Escondida, the company should also improve the treatment of existing employees and upcoming new employees.
However, it may be difficult for the Chilean Copper Company to be as "big money" as BHP Billiton, because the company is facing a transitional stage and is trying to save costs to promote a $40 billion, 10-year old mine renovation plan. The company said that the final quotation they had previously submitted to the union was "already the biggest effort within the framework of the company's transformation."
Japan’s largest smelter, JX Nippon Mining’s Caserones copper mine also went on strike last week, and so far, negotiations between the company and workers have not made progress.
In addition, Alejandra Wood, executive director of the Chilean Copper Research Center (CESCO), pointed out that the Chilean government is currently discussing raising mining royalties to help protect social welfare, and has proposed a motion to amend the constitution. The new constitution may affect rivers, lakes, The enforcement of stricter regulations on glaciers, minerals, and community power also puts more pressure on miners.
She said: "Copper prices are high, and there is a widespread view that (copper miners) must share profits... The current market and political conditions are undoubtedly affecting workers' expectations."
