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The
union, which represents about 2,400 workers, began striking on
Tuesday at Escondida, the world's largest copper mine, after
failing to reach a deal over pay. The strike had started to push
up global copper prices.
But on Friday, BHP said the two sides reached an agreement after
resuming talks. Sources at the company and the union told
Reuters that BHP offered workers around $32,000 as a bonus and
an additional $2,000 in soft loans.
BHP had previously offered a $28,900 bonus per worker, compared
with the union's demand of 1% of shareholder dividends from the
mine, or roughly $35,000 to $36,000 per member.
"BHP and Union No. 1 have come to an agreement for a collective
contract proposal. Along with that, it was agreed to suspend the
strike," BHP said.
In a statement, the union said the contract offer had
overwhelming support from its members and the deal would be
signed.
"I feel this is the greatest recent union victory in terms of
results," said Marco Lopez, a lawyer for the union.
"Not just because of the economic part, but substantial
improvements in historic demands we hadn't been able to achieve
(before)."
Andres Gonzalez, head of mining analysis at Plusmining
consultancy in Santiago, said the deal could have an impact
beyond Escondida.
"The large sums in this negotiation could mark a precedent not
just for Escondida, but for all of Chile's mining industry,"
Gonzalez said, adding that the industry will have to think
strategically about how to conduct future negotiations.
Gonzalez said, however, that the strike's suspension was a good
sign not just for global markets, but also for Chile's economy
since Escondida represents about 3% of the country's GDP and
around 5% of the world's copper supply.
Copper prices initially fell after the news before recovering
and were up 0.3% at $9,177.5 per metric ton after hitting a
session low of $9,047. The metal, used in power and
construction, headed to its first weekly gain in six weeks - of
3.5% - as the strike had sparked concerns about supply
disruptions.
(Reporting by Fabian Cambero in SantiagoAdditional reporting by
Polina Devitt in LondonWriting by Daina Beth Solomon and
Alexander VillegasEditing by Frances Kerry and Rod Nickel)
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