BHP's Escondida copper mine in Chile has signed a new pay deal with the union, effectively ending the risk of a strike that could have significantly impacted global copper supplies. This agreement was reached on August 19, 2024, and comes at a critical time as Escondida accounted for 23.7% of Chile's copper production in the first half of 2024, producing 614,400 tonnes out of a total national output of 2.6 million tonnes [834960ac].
The union had previously warned of a potential strike if BHP did not adequately address contract negotiations, recalling a historic 44-day strike in 2017 that had severely affected global copper markets. The new deal not only secures the workforce at Escondida but also stabilizes a vital segment of Chile's economy, which is heavily reliant on copper exports [834960ac].
In the backdrop of this development, Chile's only steel mill, Huachipato, operated by CAP, is facing closure due to competition from cheap Chinese steel imports, resulting in over $500 million in losses over the past two years. Despite government tariffs on Chinese steel, they have failed to protect the mill, highlighting the challenges faced by domestic industries in the face of global competition [8a1389f9].
The closure of Huachipato raises concerns about the future of Chile's industrial sector and the need for new strategies to protect and revitalize it. The response to these industrial challenges, including the recent deal at Escondida, will be crucial in determining the future direction of Chile's industrial policy and its ability to compete on a global scale [8a1389f9].