Workers at Minera Escondida, the largest copper mine in the world, producing nearly 20% of Chile’s total copper output, went on strike on Thursday. Escondida is operated by Anglo-Australian BHP Billiton and its main facilities are located in Antofagasta.
For several weeks, the company had been in negotiations with at least 2,500 workers grouped in Union No. 1, who requested a 25 million pesos (around USD $38,660) bonus, a 7% increase in their salaries, and the extension of benefits for operators, regardless of the time the employee has worked at Escondida.
However, the mining company offered only 8 million pesos, without salary readjustment. Nearly 99% of the workers rejected the proposal, announcing that they will go to legal action on February 9.
“We know that the company sticks to its principles. This is going to be hard. We are willing to resist as long as necessary,” said the union spokesman.
During the strike, the company expects to have around 80 employees performing critical functions such as safeguarding people, environmental care and keeping the integrity of the mine facilities.
The longest strike in Chilean mining history took place in Escondida on August 7, 2006 — for a very similar situation — and lasted for 26 days.
A side effect, at that time, was a significant increase in the value of the commodity (copper). Economists predict that the current strike, which could run for at least four weeks, could affect almost 1% of the month’s Gross Domestic Product (GDP).
“Minera Escondida could even take to zero the production expected for this month, and that could lead to a bigger overall impact,” warned Felipe Ruiz from BCI Estudios.
Econsult’s executive director, José Ramón Valente, said the paralysis, coupled with the effects of forest fires in the south of the country, could pave the way for a complex economic situation early this year.