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UPDATE 1-Union walks off job at BHP's Escondida, Spence copper mines in Chile

(Updates with analyst quote)

SANTIAGO, May 27 (Reuters) - A union of remote workers for BHP’s Escondida and Spence copper mines in Chile walked off the job early on Thursday after efforts to ink a labor contract deal with the company’s management fell through, fueling uncertainty over the global supply of the red metal.

The strike at Escondida, the world’s largest copper mine, and at the smaller Spence comes as copper prices have spiked amid soaring demand as the world’s largest economies revive following more than a year of coronavirus-induced stagnation.

The 205-member union runs BHP’s Integrated Operations Center, which remotely manages pits and cathode and concentrator plants from Santiago.

“We have started the legal strike, people are not working. Now we are organizing ourselves to see how we are going to face the coming days,” the president of the union, Jessica Orellana, told Reuters.

She called the timetable for the walk-off “indefinite.”

BHP Group Ltd said on Wednesday it would take contingency measures at its operations, and said the rest of its workers and contractors would continue with their everyday tasks.

But the strike - the first of its kind at Escondida by a group of remote operations workers - is also a test of the company’s resiliency to labor action in an era when more and more work is automated or off-site.

“We are entering unknown territory,” said Juan Carlos Guajardo, of Santiago-based consultancy Plusmining. “We’ll have to see if this is a situation that allows for easy replacement [of workers] or if it is more difficult.”

The walk-off 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.

The sprawling Escondida produced 1.19 million tonnes of copper in 2020, while Spence produced 146,700 tonnes of Chile’s total 5.7 million tonnes. (Reporting by Fabian Cambero. Writing by Dave Sherwood. Editing by Alexandra Hudson and Mark Potter)

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