Copper prices rose as a potential strike loomed at BHP's Escondida mine in Chile, the world's largest copper operation. Unionized supervisors at Escondida are voting on BHP's latest contract offer between September 28-30, with union leaders urging members to reject the proposal. If rejected, a mandatory five-day government mediation period would follow before a legal strike could commence, with a possibility of extending for another five days by mutual agreement.
This labor dispute follows a recent fatal accident at Escondida on September 23, which led to a temporary suspension and progressive resumption of operations. While the company stated that mining operations were halted completely after the accident and a significant portion of other activities were suspended, the supervisors' union accused BHP of using the tragedy as a tactic to suspend contract negotiations, a claim BHP denied, stating its request was to focus on supporting affected employees.
The potential for a strike at Escondida, which produces 1.0-1.2 million tonnes of copper annually (approximately 5% of global mined supply), has heightened concerns over global copper supply. This comes at a time when the copper market is already experiencing lower production levels, cost pressures, and a broader trend of declining global mine supply, with data from the International Copper Study Group showing a 1.1% output decrease in the first half of the year.
