IQUIQUE, Chile, May 9 (Reuters) - Subcontractors blocking access to Chile's Collahuasi copper mine resumed talks on Sunday after three days of protests that cut operations at one of the world's biggest deposits and raised the possibility of violence.
Collahuasi and a group of service companies that includes a unit of Japanese heavy machine maker Komatsu (6301.T) said on Sunday hundreds of workers were being kept inside the mine by a small group of protesters. Workers inside the mine contacted by Reuters said there had been no violence between workers.
Manuel Munoz, president of the union representing full-time workers at the mine, said his union sympathized with the protest and he expected a resolution to the blockade soon.
"A formal, direct sit-down makes me believe we will have positive results from talks," Munoz said.
The protest in Collahuasi, which produces 3.3 percent of the world's mined copper, may help copper prices recoup some losses last week stemming from investor fears that European debt woes may hinder the world's economic recovery.
Collahuasi, owned jointly by Anglo American (AAL.L) and Xstrata (XTA.L), has said it is operating "under restricted conditions," but workers inside the mine said output stopped completely when the protest began on Friday.
Protest leader Ricardo Arellano said 4,000 subcontractor workers at Collahuasi are demanding a bonus and better working conditions and that their fight could spread to other mines.
"We are not alone, this is a fight against the discrimination toward thousands of subcontractors across the country," Arellano told Reuters. "We see goodwill from part of the company to resume formal talks."
Union and company officials at Codelco, the world's top copper miner, and BHP Billiton (BHP.AX) (BLT.L) said there have been no incidents involving subcontractors in their mines in Chile.
A growing wage and benefit disparity between subcontractors and their full-time peers, who can earn bonuses of up to $24,000, is a latent problem for mining companies operating in the world's top copper producing country.
The sharp recovery of copper prices following the financial crisis is also emboldening workers to demand a bigger slice of the pie.
Copper wealth has helped once-poor Chilean desert towns like Iquique turn into booming cities with high-rise buildings and luxury cars rolling along streets dotted with trendy stores.
In 2007, an occasionally violent strike by subcontractors at Codelco boosted copper prices and forced the state giant to raise wages and improve working conditions. Plans to expand the fight to other mines has been slow to develop.
Many mining companies in Chile rely on contractors to do jobs that range from transportation to processing and digging.
Collahuasi had 1,892 staff workers and 4,407 subcontractors in 2008, according a company report published last year.
TOUGH CONTRACT TALKS AHEAD
Collahuasi's full-time workers union publicly backs the protest, which could mean tough wage negotiations this year as the union contract expires in November.
Union sources said that with subcontractors on their side they hope to have the upper hand in negotiations.
Collahuasi workers went on strike during their last contract negotiation in 2007, sparking a copper price rally.
"This time we will show a united front against the company at the negotiating table," said a union source. "They will not be able to mess around with us."