BHP's Escondida Copper Mine Ramps Up Production
April 06 2018 - 12:59PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--The ramp-up of production at BHP Billiton Ltd.-run
(BHP.AU) Escondida, the world's largest copper mine, is progressing
smoothly following an expansion of processing operations there, an
executive said on Friday.
Daniel Malchuk, president of BHP Minerals Americas, also said
wage talks have begun with workers at the mine, located in the
Atacama Desert in northern Chile, but that it was too early to
speculate on the outcome.
BHP has been increasing production at Escondida, which accounts
for about 5% of the world's copper output, after building a
desalination plant that has enabled it to run three concentrators
at the site.
Copper production at Escondida increased 29% to 583,000 metric
tons in BHP's fiscal first half, the six months through December.
The miner forecast output would rise again in the fiscal second
half to meet a full-year goal of between 1.13 million and 1.23
million tons, up from 772,000 tons in fiscal year 2017.
"We continue to do very well" and the ramp-up "is proceeding as
planned," Mr. Malchuk said in an interview. "We don't foresee any
challenges at this time."
BHP is scheduled to publish its quarterly operations report on
April 19.
The Escondida mine, roughly 100 miles southeast of Antofagasta
in Chile, is 57.5% owned by BHP Billiton. Rio Tinto PLC (RIO) has a
30% stake, and the remainder is owned by joint ventures comprising
Mitsubishi Corp (8058.TO), JX Nippon Mining & Metals Corp. and
Mitsubishi Materials Corp. (5711.TO).
The threat of another strike at the operation, where union
employees downed tools for 44 days last year amid a dispute over
pay and conditions, has been supporting copper prices globally.
Mr. Malchuk said the latest round of wage negotiations began on
Tuesday, after being brought forward by company and union
officials. The existing labor agreement is due to expire in
August.
"The benefit of having an advanced process is the fact that you
have a bit more flexibility and you can have a complete dialogue,"
he said.
Credit Suisse projected the Escondida talks would be "very
influential in determining the stance of other mines and union in
Chile."
Mr. Malchuk said BHP was keen to reach a deal "in a reasonable
timeframe," but declined to comment on the company's offer to
workers.
"Any change in labor cost must be financed with gains in
productivity," he said. "Otherwise, it is not sustainable."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com.
(END) Dow Jones Newswires
April 06, 2018 13:44 ET (17:44 GMT)
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