The macro-economic condition where conflicts between workers and employers are escalating and impacting the operations of key mining projects globally is becoming a trend. BHP Group, the Anglo-Australian multinational mining metals and petroleum company, is no exception. Recently, the company was forced to implement its contingency plan when day-shift workers embarked on a strike at the world’s largest copper mine, Escondida, in Chile.
In the mega copper mine, Escondida, the union representing about 2,200 workers called for a work stoppage after salary negotiations and other terms of working conditions broke down with their employer, BHP. The strike did not come as a surprise to both parties concerned as several earlier negotiations failed with the union members ultimately casting their votes. The results laid bare an overwhelming 2,164 votes in favor of the strike compared to a meager 11 votes against it.
The strike action by the day-shift workers triggered BHP to activate its contingency plan to ensure continued production. The company had made ample preparations leading up to the strike action, aiming to minimize potential impacts to their operation. BHP’s primary focus was to ensure that their commitments to customers, shareholders, and stakeholders remained intact and the situation well managed.
Despite the contingency plan, concerns about the reduced production levels of copper were inevitable. The escalating unrest within this massive mining project would inevitably have broad implications. Being cognizant of global demand, any reduction in copper supply could potentially send shockwaves across markets and exacerbate an already fragile global supply chain.
However, BHP has insisted that the impact on production will be minimal as their contingency plan effectively includes utilizing only a limited number of workers. Notwithstanding this, the strike action is expected to last a minimum of 30 days, during which salaries of the protesting workers are likely to be withheld, increasing tensions and brewing further animosity.
While BHP and the striking workers remain locked in a stalemate, concerns about impacts on economic health extend beyond this single entity. The Escondida mine accounts for approximately 5% of global copper production, and any significant disruption can have far-reaching effects on the global economy with copper being widely used in construction, electrical equipment, and machinery.
Added to this, at a time when there are concerns about shortages of key resources due to global disruptions from the pandemic; a strike at one of the largest production facilities in the world is an issue of concern for many stakeholders beyond the direct parties involved.
In the context of previous strikes at the Escondida mine, a 44-day strike in 2017 resulted in BHP losing an estimated $1 billion. Thus, the current strike’s resolution becomes increasingly important for the company, the workers, and the global marketplace.
On the broader socio-economic front, these conflicts between workers and employers in industries that hold significant global market space reflect an imbalanced power dynamic where workers continue to demand better working conditions and fair wages.
In conclusion, the ongoing strike and BHP’s contingency plan activation at
