Escondida union in Chile optimistic will reach deal with BHP
The union at BHP's Escondida copper mine in Chile said on Friday that it saw a "favorable scenario" for reaching a deal on a new labor contract with the company, citing higher copper prices.
In a letter to its members published on its website, the union at the world's largest copper mine said BHP has promised to respond to its recent proposal for a new contract by 3pm local time (1900 GMT) on Monday.
"A favorable scenario has emerged for developing negotiations to reach a satisfactory agreement," the union said in a statement, noting that the price of copper had climbed to its strongest in 4-1/2 years this week.
"We're convinced that objective conditions justify, to investors and to the country, reaching a reasonable agreement," it added. "With that in mind we'll start talks."
The price of copper on the London Metal Exchange CMCU3 has risen more than 50 percent since hitting a nine-year low in 2016, boosting profits globally and potentially providing unions more leverage in negotiations.
Copper prices rose this week in part because of worries that Escondida workers might go on strike.
Last year, workers at Escondida downed tools for more than month and a half before opting to extend the current contract and renegotiate a new one this year. The 2017 strike jolted the global copper market and deprived BHP of $1 billion in production.
Formal negotiations between the union and BHP are scheduled to begin in July.
Earlier this week, the union said it was asking for a 5 percent increase in salaries and a one-time bonus equivalent to 4 percent of dividends distributed to shareholders in 2017, or about $34,000 per worker.
Reporting By Felipe Iturrieta, Writing By Mitra Taj.