Bitter strike, pandemic measures dent BHP’s South American production

A bitter strike over a ‘death shift’ and COVID-19 measures have dented BHP’s South American production, but another project is on track.

BHP’s quarterly production inched higher but production at its massive, one-third owned Cerrejon coal mine in Columbia continues to be hampered by an ongoing bitter strike.

The resources giant said a 2 per cent rise in group production in the September quarter was driven by its metallurgical coal and iron ore assets, although COVID-19 measures curbed output at its copper mines in South America, particularly virus-hit Chile, where the workforce was around 30 per cent lower.

BHP has maintained all production and costs guidance for 2019-20, excluding Cerrejon, where a strike that began on August 31 halved quarterly output.

Union Sintracarbon rejected a shift change it says would add 72 working days per year with no wage increase – a system that workers call the “death shift”, as they would move directly from day to night shifts without recovery time in a seven-day cycle.

The union says the change will also slash 2500 direct and indirect jobs, and while the Ministry of Labour summoned the parties to talks in a bid to resolve the conflict, the BHP, Anglo American and Glencore joint venture did not respond.

Cerrejon in Colombia is the biggest open-pit mine in Latin America.

In response to a question at the company’s annual general meeting last week, BHP chairman Ken MacKenzie said the roster system was widely used in Columbia.

“It’s important to note that Cerrejon has always been operating in a very complex environment from both an environmental perspective as well as a socio-economic perspective,” Mr MacKenzie said.

“We seek to influence how Cerrejon operates but ultimately we’re a minority shareholder.

“We as shareholders will monitor this through usual governance processes.”

BHP chairman Ken MacKenzie has defended the ‘death shift’ in dispute at the Cerrejon mine, saying it is widely used in Columbia. Picture: Supplied by BHP

Columbia’s Constitutional Court in December found the mine had damaged the health of the community on a nearby provincial indigenous reserve by contaminating the air, water and vegetation, and through noise and vibration.

Late last month, UN Special Rapporteur on human rights and the environment David Boyd said the joint venture had not done enough to remedy the problems despite court orders and called for work at Cerrejon – the biggest open-pit mine in Latin America – to be suspended.

BHP’s stake in the mine is among energy coal assets it seeks to exit as it concentrates its coal portfolio on metallurgical coal, which is used in steelmaking.

BHP reiterated on Tuesday that first production from its $4.5 billion South Flank iron ore project in Western Australia remained on schedule for mid next calendar year even though it had promised to not disturb 40 ancient sites, which are highly significant to traditional owners, without consulting them.

The company made the pledge in the wake of Rio Tinto’s Juukan Gorge cave blast debacle and says it has established a heritage advisory council with the Banjima people to provide input into mine planning.