BHP strike in Chile enters its third day, boosting global copper price

The strike at BHP's massive Escondida Mine in Chile, which entered its third full day on Thursday boosted global copper prices. A continuing standoff between BHP and the workers is spreading concerns about the supply of red metal.

BHP and the union of workers held an initial meeting Wednesday to try to defuse a strike. However, they failed to reach a breakthrough which would have allowed the restart of formal negotiations. The miners are now digging in to demand a greater share of profits.

The benchmark three-month copper price on the London Metal Exchange rose by over 2.2% on Thursday to $9,169 a metric ton. Shares of mining companies like Rio Tinto Southern Copper, Freeport-McMoRan and Freeport also increased.

Escondida, the largest copper mine in the world, will account for nearly 5% in global supply by 2023. In the past, the strike forced the company to stop operations and declare "force majeure", meaning that it could not fulfill its contract.

BHP announced Wednesday that operations would continue under a contingency planning, while the union claimed the strike had kept the Los Colorados electrowinning and concentration plants offline.

Both sides have indicated a willingness for formal talks to resume, but are still at odds over conditions. BHP asked the union for a pause in its strike so that they could resume negotiations. The union refused.

A number of workers also have set up camp in Puerto Coloso, BHP’s exclusive port which houses the desalination plant. (Reporting and writing by Fabian Cambero, Alexander Villegas, editing by Jonathan Oatis).

(source: Reuters)