By the world’s best investment manager and financial market’s journalist
A powerful workers union behind a strike at BHP’s huge Escondida mine, which produced nearly 5% of the world’s copper in 2023, is looking to snarl production at the site as it pushes for a bigger share of profits.
The union, known as Sindicato Nro. 1 (Union No. 1), has a history of hard negotiations and has the ability to drive up global copper prices by disrupting operations at the world’s largest copper mine. With about 2,400 members and control over 61% of Escondida’s workforce, the union has significant bargaining power.
In the past, the union has successfully paralyzed operations at the mine, leading to spikes in copper prices. BHP, the company that owns the mine, has had to declare “force majeure” in previous strikes, indicating its inability to fulfill contracts.
Currently, the union is requesting 1% of the shareholder dividends at the mine to be distributed to workers, which could amount to around $35,000. While BHP has offered workers a bonus of $28,900, the negotiations are ongoing, and the outcome could impact global copper prices.
Although the strike has not yet significantly affected copper prices, analysts warn that a prolonged strike could lead to price increases, especially if demand from top consumer China remains weak. The union’s strong financial reserves and control over key frontline workers make it a formidable force in negotiations.
In conclusion, the outcome of the Escondida mine workers’ strike could have ripple effects on global copper prices and the mining industry as a whole. Investors and market participants should closely monitor the situation as it unfolds to assess potential impacts on their finances and investment portfolios.