BHP's Escondida mine strike becomes Chile’s longest, talks end with no deal

Talks between striking workers at Escondida copper mine in Chile and majority owner and operator BHP Billiton (ASX, NYSE:BHP) (LON:BLT), ended Thursday with the parts failing to reach a deal and the company promising a prompt resumption of operations.

The labour action at the world’s largest copper mine, which has entered its 43th day, has now become the longest private-sector mining strike in Chile’s history, local paper El Mercurio reports (in Spanish).

It still has a long way to go before matching the 74-day strike at Codelco’s El Teniente mine in 1973, which took place shortly before the military coup that overthrew socialist President Salvador Allende.

Marcelo Castillo, the mine’s president, declared talks officially over and said the company is now ready to dissolve the bargaining group and leave the negotiating table.

He added Escondida would also evaluate an option given by the Chilean labour code that would allow miners who choose to come back to work to do so under the previous contract for the next 18 months. At the end of that period, both sides would again need to try to reach a new agreement.

That option, known as Article 369, would create a complex scenario for both parties, Castillo said, as it would force Escondida to review its production structure, operating model and business strategy.

The company has already warned the long-dragged stoppage would force it to revise its operational plan, leading to a downward adjustment of its planned production volumes for the year.

Last week, Castillo warned that he would start hiring temporary workers to replace those joining the strike action, given that BHP, which owns de 57,5% of the mine, has already reported more than $712 million in losses.

Talking to MINING.com earlier this month, Chile’s Mining Minister Aurora Williams also expressed concerns about the losses caused by the strike. “We estimate that some 3,400 tonnes of copper are not being produced each day of the strike. This translates into 100,000 tonnes per month,” she said.

Since the strike began last month, is estimated that Escondida — responsible of about 5% of the world’s total copper output — has failed to produced more than 120,000 tonnes of the red metal.

While majority-owned and operated by BHP, Rio Tinto and Japanese companies such as Mitsubishi Corp also hold stakes in the mine.

Chile is the world's biggest copper producer, and sales of the metal make up for about 60% its export earnings.

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