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21 August, 2006
The two-week-old strike by miners in Chile against the world’s largest copper producer, Minera Escondida Ltda., continues today despite negotiations over the weekend with lead company BHP Billiton. The talks were spurred by Chile’s government following a blockade by strikers aimed at preventing the company from operating with replacement workers.
Following talks that failed midway through last week, some 300 miners, members of Escondida Workers’ Union No. 1, blocked access roads leading to the operations near Antofagasta, some 1,400 kilometres north of the Chilean capital of Santiago. Police attempted to reopen roads, using water canons and other forceful methods.
Despite declaring force majeure following the start of the strike on 7 August, BHP Billiton, the majority owner of Minera Escondida, was using replacement workers to carry forth production. The company declared that it was maintaining copper smelting and cathode processing at 40% of capacity, or 3,600 tonnes per day, and extraction processes at 10% capacity using substitute workers.
Miners and police clashed for two days, 17-18 August, before Chilean President Michelle Bachelet ordered Labour Minister Osvaldo Andrade to intercede with mediation efforts. Those talks were held throughout the weekend and BHP Billiton did increase its salary offer.
Some 2,052 members of the union are on strike at Minera Escondida, representing 96% of the company’s workers. The union lowered its wage demands from 13% to 10% since the strike began, and BHP’s revised salary offer, issued on 19 August, did offer hope that the strike could be settled early this week.
In bargaining last week, BHP Billiton did not move from its wage proposal of 3% above Chile’s inflation rate. Escondida Workers’ Union No. 1 is also seeking a one-off bonus of US$29,629, while the company is offering significantly less.
The union says its demands would only cost the company 1% of its profits for 2006. Since a prior labour agreement was negotiated in 2003, copper prices have increased nearly six fold. The union has secured individual loans totalling up to US$1,841 for each miner, if necessary, to cover their expenses through the end of the month.
Rio Tinto, a Japanese consortium led by Mitsubishi, and the World Bank’s International Finance Corp. are the other stakeholders at Escondida, a company that last year produced 8% of the world’s copper supply. BHP Billiton owns 57.5% of the copper operation, and is the managing partner.