(Adds company declaring force majeure on shipments, recasts
By Fabian Cambero and Anthony Esposito
ANTOFAGASTA, Chile Feb 10 BHP Billiton's
Escondida in Chile, the world's largest copper
mine, will not be able to meet its contractual obligations on
metals shipments after a 2-day-old workers' strike brought
production to a standstill, a company spokesman said on Friday.
Copper prices on the London Metal Exchange rose 4.5
percent to hit $6,083 a tonne, its highest since June 2015, on
market chatter that force majeure would be declared, meaning
unavoidable circumstances would prevent the mine from fulfilling
"I can confirm that force majeure has been declared," a
company spokesman told Reuters.
Workers in the 2,500-member Escondida Union No. 1 downed
tools early on Thursday after collective wage talks with the
company failed, beginning a strike that threatens to imminently
affect supplies for one of the most widely used industrial
metals in the world.
BHP had said it will not produce copper during the strike,
and instead will focus on maintaining minimum services, which
consist of small teams of workers maintaining equipment and
making sure the mine adheres to environmental protocols. It also
has said it will continue with investment projects.
The union has warned that it is ready for a long strike,
saying that it has enough provisions and rations for striking
workers to last about two months.
In an apparent signal that striking workers were not looking
to budge any time soon, they continued on Friday to build an
encampment outside the mine, which is 3,100 meters above
sea-level on an arid plateau in Chile's Atacama desert, putting
in semi-permanent installations, such as bathrooms and sleeping
"We're continuing with our installation, with the
construction (of the encampment)," said union spokesman Carlos
Allendes. "We're in the organization process and we're improving
For the moment the union and company appear far from
reaching an agreement. The union says the company's last offer
curtailed their current benefits and put senior and newer
workers on unequal footing in terms of benefits, something they
Three workers doing expansion work at the company's Los
Colorados concentrator, one of the investment projects where
work has not stopped, were injured in a fire early on Friday,
the company said. It is being investigated.
Copper prices already surged in recent session in the run-up
to the strike at Escondida, which produced 1.15 million tonnes
of copper in 2015, or 6 percent of global output that year.
Escondida is majority-controlled by BHP, with Rio Tinto
and Japan's JECO also holding stakes.
(Writing by Gram Slattery & Anthony Esposito; Editing by Bill