Exclusive-Union at BHP's Escondida mine urges rejection of contract offer, strike possible

By Fabian Cambero

SANTIAGO (Reuters) - The union at BHP's Escondida mine in Chile, the world's largest copper mine, has called on its nearly 2,400 members to reject a final contract offer from the company and prepare for a strike, the union president said.

Union President Patricio Tapia told Reuters that workers will vote from Monday to Thursday. The union's stance on the contract offer has not previously been reported.

If workers reject the deal, a strike could start immediately. But Chilean legislation lets either party call for five days of government mediation, extendable by another five days if both parties agree.

Tapia in the interview on Saturday said that if union members strike, the company would not be able to produce copper since replacement workers are prohibited by law and the union represents 98.5% of frontline operational workers at Escondida.

In 2017, more than 2,300 union members took part in a 44-day strike at Escondida, hurting production and pushing global copper prices up.

"We are much better prepared (for a strike) than before. We have a significant strike logistics fund, four times larger than the one from 2017," Tapia said. "And we also have credit agreements to meet the basic needs of workers and their families for a long time."

Tapia said that workers were proposing that they receive an amount equal to 1% of shareholder dividends. This amount would be paid over the three-year life of a new contract.

In fiscal 2023, BHP has said it paid out $8.6 billion which would be about $36,000 for each of Escondida's 2,390 workers.

"We have the right to expect that profits will be shared with workers," Tapia said, adding that record copper prices make Escondida a "fabulous business."

Few details on BHP's contract offer were disclosed aside from a proposed a 20 million Chilean peso ($21,044) bonus per worker.

BHP told Reuters its offer would increase benefits and add new ones.

"With this latest offer the company hopes to reach a new agreement that recognizes workers' contributions and allows us to move forward in a sustainable way in face of Escondida's challenges," the company said in a statement.

Tapia said the union also wanted to improve conditions for workers who lose their jobs due to outsourcing and automation as well as health benefits, bonuses and more.

The union and BHP have repeatedly clashed due to work stoppages, pressure to increase production and complaints about worker safety.

($1 = 950.3900 Chilean pesos)

(Reporting by Fabian Cambero; Editing by Alexander Villegas and Cynthia Osterman)