BHP Group reached a preliminary wage agreement with union leaders in Chile, potentially averting a costly strike at its Spence copper mine, which produces about 1% of the world's copper supply.

Over 1,100 union members at the Spence mine will vote on the new offer in the coming days, according to a statement from the Melbourne-based company. The breakthrough came on the final day of mediated talks, with both sides agreeing to an extension to seek member approval. Union boss Ronald Salcedo stated the vote's outcome will be known by Friday afternoon.

Avoiding a strike at Spence, which produced about 250,000 metric tons last year, would ease tensions during a busy period of collective bargaining in Chile's copper mining sector. This agreement may also alleviate concerns over upcoming labor talks at BHP's larger Escondida mine, which has experienced lengthy strikes in the past.