• 2 hours Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 4 hours Venezuelan Output Drops To 28-Year Low In 2017
  • 6 hours OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 9 hours Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 10 hours Kinder Morgan Delays Trans Mountain Launch Again
  • 11 hours Shell Inks Another Solar Deal
  • 1 day API Reports Seventh Large Crude Draw In Seven Weeks
  • 1 day Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 1 day EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 1 day IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 1 day Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 1 day Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 1 day Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 1 day Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 2 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 2 days Norway Grants Record 75 New Offshore Exploration Leases
  • 2 days China’s Growing Appetite For Renewables
  • 2 days Chevron To Resume Drilling In Kurdistan
  • 2 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 2 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 2 days Nigeria Among Worst Performers In Electricity Supply
  • 3 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 3 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 3 days Saudis To Award Nuclear Power Contracts In December
  • 3 days Shell Approves Its First North Sea Oil Project In Six Years
  • 3 days China Unlikely To Maintain Record Oil Product Exports
  • 3 days Australia Solar Power Additions Hit Record In 2017
  • 3 days Morocco Prepares $4.6B Gas Project Tender
  • 3 days Iranian Oil Tanker Sinks After Second Explosion
  • 6 days Russia To Discuss Possible Exit From OPEC Deal
  • 6 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 6 days Kenya Cuts Share Of Oil Revenues To Local Communities
  • 6 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
  • 6 days Russia’s Lukoil May Sell 20% In Oil Trader Litasco
  • 6 days Falling Chinese Oil Imports Weigh On Prices
  • 6 days Shell Considers Buying Dutch Green Energy Supplier
  • 7 days Wind And Solar Prices Continue To Fall
  • 7 days Residents Flee After Nigeria Gas Company Pipeline Explodes
  • 7 days Venezuela To Pre-Mine Petro For Release In 6-Weeks
  • 7 days Trump Says U.S. “Could Conceivably” Rejoin Paris Climate Accord
Alt Text

World Class Copper Auction Draws Major Interest

Peru’s mega Michiquillay copper is…

Alt Text

This Major Political Shift Could Rock Copper Markets

Chile’s upcoming Presidential elections could…

Is The End Of The Escondida Strike A ''Disaster'' For This Mega-Mine?

Andes mine

Major South American miner Milpo dealt a major blow to the copper sector this past Thursday. Announcing that it will pull out of the Michiquillay project in Peru — one of the country’s largest undeveloped copper deposits.

Milpo cited government investment terms as a major reason for the company’s withdrawal. And elsewhere in South American copper, fiscal realities are looking ever more challenging for miners.
Like in world-leading producing nation Chile. Where BHP Billiton got some very tough news on labor terms at the world’s largest copper mine, Escondida.

The good news for BHP was the end of a 43-day strike at Escondida — with labor unions Friday officially announcing they will halt labor action here.

But there was also bad news for the mine’s owners: the method workers used to resolve the strike.
The Escondida labor action ended without workers and management coming to a new agreement on pay. Instead, workers used a loophole in Chilean law — which gives unions the option to continue under their previous contract terms for an additional 18 months.

That means workers get to push off wage negotiations until late 2018. And that may be a major problem for Escondida’s owners.

The issue is changes coming in Chile’s labor laws. As of April, it will become illegal to reduce previous benefits for workers — meaning that the current contract will become a floor for Escondida’s workers in any future negotiations.

The new labor laws will also make it illegal to replace striking workers. Substantially weakening management’s power when workers walk off the job from now on. Related: The Upcoming Surge In U.S. Oil Demand Explained In One Chart

Chilean labor experts thus called this week’s outcome a disaster for BHP. Saying that things are likely to stay tense between workers and management over the coming months and years.

The fallout appears to be starting already. With BHP saying late last week it is suspending two major capital projects in Chile — a desalination plant and an expansion of the Los Colorados concentrator plant.

All of which is a big blow for investor confidence in Chile’s mining sector. Watch for more cuts in activity and planned projects from BHP and other miners in the country.

Here’s to the bitter end.

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News