Escondida Workers Reject BHP Wage Proposal, Union Says

Workers at BHP Billiton Ltd.’s Escondida copper unit in Chile turned down a company proposal to agree on a wage contract before terms expire next year, threatening a stoppage at the world’s largest copper mine.

Plant workers and mine shift workers “unanimously” rejected the proposal at meetings on Dec. 22, the union said on its website today. The company can still propose a higher offer before compulsory negotiations are triggered as the workers contract expires in July 2013, union official Marcelo Tapia said in an interview today.

“The proposal was bad in terms of the monthly bonus payments,” Tapia said by telephone. “The company can still make a new proposal.”

A failure to reach an agreement may strain world copper supply next year as workers can legally go on strike once the deadline for compulsory negotiations expires on July 31. BHP’s Escondida mine accounts for about 6 percent of the world’s mined copper supply.

The mine’s workers went on a two-week strike last year in a protest over bonus payments and working conditions.

BHP, which owns 57.5 percent of Escondida, is planning a $4 billion expansion to boost output to about 1.3 million metric tons by 2015, the company said. Output at Escondida may increase by 20 percent this year after the company completed a $130 million de-bottlenecking project, Chief Executive Officer Marius Kloppers told analysts Oct. 25.

Rio Tinto Group holds a 30 percent stake in Escondida, located in Chile’s Atacama Desert. The balance is held by a Japanese consortium led by Mitsubishi Corp.

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