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UPDATE 1-BHP to take contingency measures at Chile mines after strike called

(Adds comments from BHP, details)

SANTIAGO, May 26 (Reuters) - BHP Group Ltd said on Wednesday it would take contingency measures regarding operations in Chile after a labor union at its Escondida and Spence copper mines rejected the global mining firm’s contract offer and called for a strike.

The union, representing 205 workers who run BHP’s Integrated Operations Center, which remotely manages pits and cathode and concentrator plants from Santiago, has called on members to walk off the job from Thursday.

The Escondida and Spence mines have given notice “they will adopt contingency measures within the framework established by law,” BHP said in a statement, adding that workers who were not part of the union and contractors would keep working.

The impact of the strike on BHP’s operations in Chile was not immediately clear, as the negotiations between the remote operations union and the firm are the first of their kind. Escondida is the world’s largest copper mine and Chile is the world’s top producer of the red metal.

The strike comes as global copper prices hover near record highs and amid rising political risk in the region, with potentially big political shifts under way in both No. 1 copper producer Chile and neighboring Peru, the No. 2 producer.

Escondida produced 1.19 million tonnes of copper in 2020, while Spence produced 146,700 tonnes of Chile’s total 5.7 million tonnes.

BHP and the union had completed a period of five trading days of government-ordered mediation, which could have been extended. But union members decided to strike, saying the offer on the table was insufficient.

“The final proposal represented a responsible effort of the company which corresponded to competitive market benefits,” the company added in its statement. (Reporting by Fabian Cambero; Writing by Adam Jourdan; Editing by Peter Cooney)

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