Read this article in:
4 September, 2006
The mining world’s largest stop-work action so far in 2006 ended on 31 August when Chilean copper miners of the Escondida Workers’ Union No. 1 voted, 1,607 to 121, to accept a 40-month collective agreement.
A settlement, which ended the 25-day strike, occurred the day before when the union and BHP Billiton, the lead company in Minera Escondida Ltda., agreed to salary and bonus terms with the regional Labour Ministry serving as mediator. The Escondida mine is located in Chile’s northern Region II.
Miners won a satisfactory share of the huge profits made by the world’s biggest copper producer. The union’s 2,052 miners will receive a salary increase of 5% above Chile’s inflation rate, or 8%, and a one-off bonus of US$17,000 per miner. The union had amended its demands in last week’s bargaining to 8% above the inflation rate and a bonus of US$29,000.
The new agreement also includes universal health care coverage, education allowances, and interest-free loans, totalling about US$4,000 per miner. Workers began returning to their jobs late last week, with full production expected by the end of this week.
Under Chilean labour law, workers can sign individual contracts and return to work after 16 strike days. BHP Billiton was hoping this would occur as it called for strike-breakers and a return to normal production. However, the company’s scab plan failed and it increased a final pay offer when it became apparent that only a handful of miners – estimated at 20 – abandoned the strike.
BHP Billiton, a 57.5% stakeholder in Minera Escondida, said in a statement that it is “convinced that the final result of this large process will prove beneficial to both sides.” The company and other stakeholders have seen profits triple from Escondida during the first six months of 2006, from US$936.9 million in the first half of 2005 to US$2.92 billion. The strike at the operation producing 8% of the world’s copper supply stoked fears of a global shortage of the red metal. The current copper market is one of high demand, causing high pricing.
The settlement will now loom large in negotiations between Chilean state-run copper company Corporacion Nacional del Cobre (Codelco) and its unions, covering 17,000 miners. Codelco’s workers are among the lowest paid miners in Chile, while Escondida workers are now the highest. Negotiations between Codelco and unions at three of its four divisions begin in October 2006, with contract expirations coming on 30 November and 31 December.
Codelco stands as the world’s biggest copper company, with huge reserves at its Andina, Norte, El Salvador, and El Teniente mines. Some 25% of the world’s total supply of copper originates from Chile.