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BHP Escondida, Chile Strike Costs $1.3 Billion+

BHP Billiton is still counting the $1.3 billion plus costs of a six-week strike at one of its biggest mines, while the stoppage has left Chile’s economy hovering on the edge of its first economic downturn in eight years. The losses at Escondida probably will total 220,000 to 230,000 metric tonnes, representing about 1% of annual global production, according to Chile’s copper agency, Cochilco. That’s more than a $US1 billion ($1.3 billion) loss at today’s prices.

While the Escondida copper mine in Chile has resumed production, it’s taking the restart “calmly” with safety a priority, BHP President Operations Minerals Americas Danny Malchuk told reporters in Santiago on Tuesday. Lost output will be revealed in the Melbourne-based company’s operational review later this month, although production wasn’t the only area affected. Construction of building projects including a desalination plant were also interrupted, with commissioning to be delayed.

For BHP, the wage dispute continues, with the two sides at Escondida failing to reach an agreement.  Workers have opted to return to their old contracts and resume talks next year under a new labour code. While BHP is confident they will reach a wage agreement at Escondida, the mine still has work to do to improve its productivity.

“I still think we can repair the labour relationship,” he said. “I see the following 18 months as an opportunity to establish a conversation with our workforce and keep pushing Escondida forward.”he said.

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