BHP (ASX, LON: BHP) and the supervisors’ union at its Escondida mine in Chile have reached a preliminary agreement to avert a strike at the world’s largest copper operation.
Members of Union No. 2 will vote online on the mining company’s latest proposal between 9:15 a.m. and 11:30 a.m. local time. If they reject it, the work stoppage would begin on Thursday, October 15, at 8:00 a.m., local newspaper La Tercera reported.
The tentative agreement emerged from last-minute negotiations after earlier contract talks failed to produce a deal.
The prospect of a shutdown had supported copper prices amid concerns that lost production at Escondida could tighten global supplies. A ratified agreement would remove one immediate threat to output, although Chile’s copper industry faces mounting operational and environmental risks.
Mounting disruptions
Labour disputes, operational setbacks and extreme weather linked to a stronger-than-expected El Niño are testing Chile’s copper producers, adding uncertainty to supply forecasts as analysts question the sustainability of recent price gains.
A deadly landslide at Codelco’s El Teniente mine over the weekend halted production at an open-pit section of the operation. El Teniente is the world’s largest underground copper mine and the state-owned producer’s biggest operation.
The incident adds to concerns highlighted in an early October study by GEM Mining Consulting, which estimated that an average 5.2% of production at Chile’s largest copper mines was vulnerable to strikes, severe weather, accidents and geological problems.
El Teniente, Escondida among riskiest
GEM’s Production-at-Risk Index assessed 14 major copper operations against eight threats, assigning risk scores ranging from 2.6% to 9%.
El Teniente ranked as the most exposed operation, with 9% of production at risk, followed by Los Pelambres at 8% and Escondida at 7.5%. Nine of the mines assessed had at least one threat classified as high risk.
The findings suggest that even if Escondida’s tentative labour deal is ratified, Chilean copper production remains vulnerable to disruptions beyond collective bargaining.