On March 23, Chile’s longest ever private-sector strike culminated in a collapse in negotiations, and no deal for the two parties. The long-running dispute began when BHP Billiton, majority owner of Escondida, rejected workers’ demands for a contract that safeguarded existing benefits. Escondida is the largest copper mine on the planet, and is responsible for producing approximately five percent of the world’s copper. The lengthy strike has resulted in an estimated 120,000 tonnes of copper output being foregone, triggering instability in global markets.
BHP has reported over $712m in losses since the strike began
The mine’s president, Marcelo Castillo, has declared that talks are officially over, and that workers are to return to work on March 25 with no changes to their conditions or contracts. Talks came to an end after the miners’ union chose to invoke a Chilean law that permits them to extend their old contracts by 18 months. The law has the effect of delaying the need for an agreement until the period comes to an end.
BHP has already reported over $712m in losses since the strike began. Along with this disruption, the company also has faced an uphill struggle since a drop in copper prices in January 2016 sent prices to their lowest levels for over seven years. While BHP holds a 57.5 percent stake in the mine, other companies, including Rio Tinto and Mitsubishi, also own substantial stakes.
The strike has taken its toll on the Chilean economy, having already dragged down the country’s GDP by an estimated one percent in February. Sales of copper make up approximately 60 percent of Chile’s export earnings, and economists have predicted that the strike could trigger a recession in the country. The economy has already contracted by 0.4 percent in the final quarter of 2016, and the strike is likely to have substantially dented output for the first quarter of 2017.