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BHP Billiton $28,000 Miner Bonus Emboldens Strikers at Codelco
Jan 4,2010 10:34CST
industry news

Jan. 4 (Bloomberg) -- Workers at Codelco, the world's largest copper producer, are poised to strike for the first time in 13 years after failing to win bonuses matching the $28,000 per worker BHP Billiton Ltd. agreed to pay its Chilean miners.

Employees at the Chuquicamata mine in northern Chile, the world's second largest, will strike from 5 a.m. local time after failing to reach an accord ahead of a Dec. 31 deadline, union official Jaime Graz said in a telephone interview yesterday.

Copper surged 4.3 percent last week in London and gained to a 16-month high in New York on concern the strike will disrupt output in Chile, the world's biggest copper producer. The mine is part of Codelco's Norte division, which produced almost half the company's total output of 1.55 million tons in 2008. The company supplies about a tenth of the world's mined copper.

"It's a fight against Goliath that we have always won," union leader Miguel Lopez said in a Dec. 31 telephone interview, referring to the union's pay talks with state-owned Codelco. "We will sit down and talk, but it depends on them."

Codelco workers are demanding higher pay after BHP offered workers at its Escondida mine a one-time bonus worth 14 million pesos ($27,588.93) in October, said Gustavo Lagos, a professor of mining at Chile's Catholic University. Codelco has offered workers a bonus of 11.5 million pesos. Escondida, the world's largest copper mine, is also located in northern Chile.

Buoyed by prices that have more than doubled this year, workers rejected the offer on Dec. 22. Copper prices rose 69 percent in 1994, the biggest gain in about 7 years, prompting workers to strike two years later after they demanded a share of the profits in labor talks that occur every three years.

‘High Expectations'

"This is the 2009 version of 1996," said Hernan Guerrero, president of one of the three unions representing Chuquicamata miners. "Like now, workers had very high expectations."

In a crumbling assembly hall in the abandoned mining village of Chuquicamata on Dec. 22, 1,500 workers silenced union leaders reading out the company´s proposals with deafening shouts of "strike, strike, strike," backed by loud drum-beats.

More than 4,000 workers held a blockade at the mine, which is a century old and more than 1,000 meters deep, in early December, paralyzing production for a day and costing the company 1,820 metric tons in lost copper output.

Don't Often Strike

Codelco employees don't often go on strike because they are among the best paid workers in the country, said Andres Fuentes, a labor specialist at PriceWaterHouseCoopers LLC.

"My reaction to the strike is the same as that of many Chileans who don't understand how you can reject an offer that would be very attractive to the immense majority," Finance Minister Andres Velasco told reporters on Dec. 30.


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