Workers at the giant Escondida copper mine in northern Chile, the world's largest, have rejected an opening pay offer as insufficient as the two sides prepare for the start of a new collective wage agreement, the union at the mine said Wednesday.
In its letter to members, the union said the management proposal included the reduction of some existing benefits but that it would refuse to consider these during talks.
"In order not to waste time recovering what's already been gained, we shall focus our efforts to debating the points of the union's proposal which continue the necessary improvements in our conditions," officials wrote.
The BHP Billiton-controlled operation produced 1.153 million mt of copper in 2015; however, production fell by almost 20% last year as the mine worked through lower grade ores. The company posted a 43% drop in profits for the first nine months of 2016, reflecting the lower production and copper price in the period.
Escondida is the latest major mine in Chile to face pay negotiations in recent weeks.
Last month, workers from six unions at the state-owned Chuquicamata copper complex in northern Chile voted to accept an offer which saw them forgo a pay rise in exchange for a signing bonus of Chilean Peso 4.35 million ($6,500).
While companies are striving to reduce costs following the sharp fall in the copper price since 2013, workers are keen to defend benefits during the commodity boom.
Under Chile's rigid rules for collective negotiations, negotiations between the sides will continue until January 24, when management must submit its final offer to be voted on by the union's members.
If workers reject the offer, the law allows for five days of mediated talks. If unsuccessful, the union is permitted to strike, which means a strike could begin in early February.
BHP Billiton owns 57.5% of the Escondida mine while Rio Tinto owns 30%. The remainder is held by two Japanese consortia.
