Chile Copper Miners Likely to Nix Lundin Offer, Union Boss Says

(Bloomberg) -- Workers at the Candelaria copper mine in Chile are leaning toward rejecting owner Lundin Mining Corp.’s latest wage offer, signaling that a strike will extend into a second month, according to a union leader.

Management presented a new proposal to the AOS union on Thursday that included a signing bonus of 17.5 million pesos ($22,800) per worker. The monetary aspects of the offer have improved, but benefits continue to fall short of demands, AOS President Evelyn Walter said. There is also a gap between what underground and open-pit workers earn that needs to be addressed, she said.

Given Toronto-based Lundin’s proposal was a formal offer, the union is obliged under Chilean labor laws to hold a vote. That will take place on Tuesday.

“The trend for now among members is rejection,” Walter said by telephone.

The union’s 500-plus members have been on strike since Oct. 20, with the mine largely halted since then, although one processing plant continues to operate. Another smaller union has also walked of the job. Union leaders accuse management of intransigence, while the company has condemned a series of road blocks during the strike. Tensions flared earlier this year over staff cuts.

Candelaria produced 111,400 metric tons last year, government data show. While that’s a small fraction of the output at giant mines owned by BHP Group and Codelco, the collapse in talks underscores supply risks in a country that accounts for a quarter of global production.

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Chile is entering into a busy period of collective bargaining at a time of strong Chinese demand that has copper at the priciest in more than two years. Mines owner by BHP and Antofagasta Plc narrowly avoided strikes earlier this year while two unions at Antofagasta’s Centinela mine are currently engaged in wage talks, as is a small union at Codelco’s El Teniente.

Despite operating with reduced staffing levels, Chilean mines have largely maintained output during the pandemic, allowing the country to fully benefit from high prices. While concerns over job security may give companies an advantage in the wage negotiations, unions are digging in, empowered by a year of social unrest that led to voters opting to draft a new constitution.

“The effort of workers who continued to work in a pandemic must be rewarded in negotiations,” said Distrito Centinela union boss Luis Redlich.

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