Strike briefly shuts down operations at BHP’s Spence mine in Chile

BHP is spending $2.5 billion to expand its Spence copper mine in Chile. (Image courtesy of BHP.)

The Spence copper mine was operating normally again following the union strike announced on Wednesday, the company said.

On Monday, unionized workers at BHP’s Spence copper mine in Chile downed tools over layoffs, halting operations at the mine until today.

The move followed the dismissal of 49 workers and eight supervisors, union president Ronald Salcedo told local radio Bío Bío, which made the remaining workers feel unsafe about their jobs and prompted the shutdown.

The Spence copper mine in northern Chile is BHP’s second biggest in the country after Escondida, the world’s largest. Last year, it produced 198,600 tonnes of the red metal.

The company has committed to spend $2.5 billion to extend the mine’s life another 50 years.

The Spence copper mine is BHP’s second biggest in Chile after Escondida, the world’s largest.

Spence’s expansion is aimed the construction of a concentrator plant and a desalination plant at Mejillones port, located about 60 km north of Antofagasta city, which will be built and operated by a third party. BHP has committed to a 20-year lease worth $1.43 billion.

It is estimated the Spence project will generate 5,000 jobs during its construction phase, and, according to chief executive Andrew Mackenzie, will create long-term value for shareholders in one of BHP’s preferred commodities.

“These layoffs are strange given that costs are under control at the mine and even more so given that the company is pushing the upgrade project, which should mean contracting more workers,” Salcedo told Bío Bío radio.

BHP, already the world’s second-biggest listed copper miner, has taken steps towards increasing its presence in the market. Together with approving the expansion of Spence, the company last year raised its annual exploration spending by 29%, allocating nearly all of its $900 million budget to finding new copper deposits.

In October, BHP nearly doubled its stake in SolGold (LON, TSX: SOLG), which is developing the Cascabel copper-gold project in Ecuador, 180 km north of the capital Quito.

Earlier this week, the mining giant — which has also targeted tier-one copper deposits in Canada, Peru and the south west of the United States — made a rare public disclosure of drilling results from a very early-stage exploration program in South Australia, close to its Olympic Dam copper-uranium mine. The find is already being called by some experts “the thickest high-grade copper intersection seen in years.”


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