BHP Billiton’s Diego Hernandez has been named as the next CEO of Chile’s state copper company Codelco, as it struggles to keep production at record levels while easing tension with unions.

Hernandez, BHP’s president of base metals, will take up his position on 19 May, replacing current CEO Jose Pablo Arellano.

Hernandez is considered to be a tough labour negotiator, skills that could help him deal with Codelco’s powerful labour unions that have threatened to protest if the government decides to sell part of the company.

During his tenure at BHP, Hernandez dealt with unions during a 25-day strike at the world’s largest copper mine, Escondida, in 2006, and again in 2009, when workers at Billiton’s Spence mine went on strike for 42 days.

Hernandez will also have to find ways to finance $2.3bn in planned investment in 2010 as the government reviews Codelco’s budget in the wake of a massive earthquake on 27 February that left the government with an $8.4bn bill for the state’s share of the damage.