CHILE: Strike at Escondida, the world's biggest mined copper deposit, enters its third week

A strike at Chile's Escondida, the world's biggest mined copper deposit, entered a third week on Monday (August 21) after union workers rejected the company's latest wage offer but said they wanted to continue talks. Workers chanting slogans against the mine rejected a proposal late on Sunday (August 20) accusing majority-owner BHP Billiton Ltd./Plc of fiddling with numbers in its new contract proposal that included bonuses and interest-free loans worth about $32,000 per worker. The strike has seen daily production at Escondida cut in half since it started on Aug. 7 and forced the miner to declare force majeure on shipments of copper concentrates. Escondida usually produces roughly 3,500 tonnes a day of copper. "We expect to be finished by today with the closing of the (voting) tables and after that we will do the recount so then later we can meet with the company and let them know what the final result are which I think will be the same as yesterday, a unanimous vote in favour of rejecting the company's offer," Union president Luis Troncoso said. But it was not clear on Monday when talks might restart. Workers rejected the company offer in a show of hands on Sunday night and formalized that vote by ballot on Monday. Copper futures on the COMEX division of the New York Mercantile Exchange rose on Monday as the strike dragged on. Copper for September delivery HGU6> advanced 9.55 cents to $3.5300 a lb. As of Monday, the fifteenth day of the strike, Chilean law says individual workers from the 2,052-member union can go back to work and strike their own deals with the company. The strike has generated debate in Chile about fair wages as profits soar for copper mining firms, the backbone of the Chilean economy, and has sent prices for the metal up and down as investors bet on how it will end. The company's latest offer on Sunday included two contract options, a four-year deal and a three-year deal, and were an improvement over earlier proposals. The four-year deal proposes the equivalent of $32,000 in strike-end and copper-price bonuses and soft loans per worker and a 4 percent wage hike for the first three years of the contract and a further 1.3 percent raise in the fourth year. The three-year deal proposal includes the equivalent of $23,500 in the two kinds of bonuses and in soft loans and a 4 percent raise over the life of the contract. But neither of them offered a market conditions bonus -- linked to high copper prices -- of more than $17,700. The union wants a copper-price bonus of $30,000 and a double-digit wage hike since copper prices now are five times higher than they were when the union signed its last contract in 2003. Escondida, also part-owned by global mining giant Rio Tinto , supplies about 8 percent of global copper output. The company reported a $2.9 billion net profit in the first half of 2006. The mine accounts for more than a fifth of the copper produced in Chile, the world's largest source of the red metal.

ITN Source | August 22, 2006

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