*

Escondida union unafraid to push hard in pay talks

*

44-day strike in 2017 drove up copper prices

*

Cashed up union stronger now than in 2017

By Fabian Cambero and Alexander Villegas

SANTIAGO, Aug 13 (Reuters) - A powerful workers union

behind a strike at BHP's huge Escondida mine, which

produced nearly 5% of the world's copper in 2023, is looking to

snarl production at the site as it pushes for a bigger share of

profits.

The union, which launched a strike on Tuesday, has paralyzed

the world's largest copper mine before and driven up global

copper prices. This time, much depends on how quickly

negotiations can unlock the standoff.

"(Escondida's union) has a history of hard negotiations,

with no fear of striking to achieve their goals," said Andres

Gonzalez, head of Plusmining consultancy in Santiago.

When the union held a 44-day strike in 2017, global copper

prices spiked as BHP declared "force majeure" two days into the

strike, meaning it could not fulfill its contracts.

The company also had to declare force majeure in 2006 after

a 26-day strike, and in 2011 the union stopped operations for 14

days. The union went on a hunger strike in 2015. A strike was

just avoided in 2021 despite a labor dispute.

Three elements make the union especially strong, Gonzalez

said. The union has about 2,400 members, about 61% of

Escondida's workforce. It has strong financial reserves to take

care of workers during a strike. And lastly, Chilean legislation

doesn't let the company replace striking workers.

"The company will be forced to stop an important part of

their operations, which evidently gives (the union) enormous

bargaining power," Gonzalez added.

Aside from comprising a majority of the total workforce, the

Sindicato Nro. 1 (Union No. 1) makes up 98% of Escondida's

frontline workers that include machine operators, drivers,

technicians and maintenance workers - all key to keeping up

production.

Patricio Tapia, president of the Escondida union since 2016

and part of the union leadership since 2008, told Reuters

previously that the union has four times more funds than in 2017

as well as credit to meet worker needs during the strike.

The 2017 strike ended when the union used local legislation

to freeze the expired contract and then negotiated for another

18 months.

COPPER MARKET CALM FOR NOW

BHP on Tuesday evening said the union had rejected its

latest invitation to restart talks, although the labor group has

asserted it is willing to resume dialogue.

The company said its contingency plan calls for allowing

non-unionized workers to continue working, and that operations

were continuing, although it did not specify to what degree.

"The (Escondida) union might be small compared to others,

but they're more than 2,000 people that control the largest

copper mine in the world," said Gustavo Lagos, an analyst from

Chile's Catholic University mining center.

A smaller strike ongoing at Lundin's Caserones

mine, also in Chile, is less likely to affect production since

only 30% of employees there are in the mine's union.

Copper prices have yet to see a big impact for the current

strike, with analysts citing weak demand from top copper

consumer China and hopes for a quick resolution. However, that

could change if the strike action hardens.

A key sticking point is a union request for 1% of the

shareholder dividends at the mine to be distributed to workers,

which would be around $35,000, according to analyst estimates.

The union also demanded this in 2021 but was able to reach an

agreement that included a bonus of about $23,000 and nearly

$4,000 in overtime bonuses.

BHP has offered workers a bonus of $28,900 this time.