Metals News
UPDATE 3-Chile Collahuasi Ops Still Limited as Strike Goes on
industry news
May 14,2010

SANTIAGO, May 13 (Reuters) - Operations at Chile's giant Collahuasi copper mine remained limited on Thursday but could return to normal by the weekend, despite a subcontractor strike entering its seventh day.

Collahuasi on Wednesday resumed limited operations after subcontractors lifted a blockade to the mine and continued their protest elsewhere, with the next round of talks scheduled for Monday.

Subcontractors left the mine on Tuesday night to avoid clashes with police. The Collahuasi mine produces 3.3 percent of the world's mined copper.

"Yesterday we started limited operations," said Collahuasi spokeswoman Bernardita Fernandez. "We started them without the subcontractors, which means at the moment we don't need them to start operations." 

She said a declaration force majeure, a contract clause that enables it to default on delivery obligations, announced on Wednesday still remained in effect. It was unclear how long it would remain in place.

Manuel Munoz, leader of the union that represents full-time staff at the deposit, said operations could be back to normal during the weekend or by Monday and that there was no damage to major mine machinery during the protest.

Daily El Mercurio reported on Thursday that subcontractors had damaged roads and taken away food and vehicles from the deposit.

Subcontractor union leader and spokesman Victor Reyes said the strikers had agreed to talks with the company on Monday mediated by local authorities in the far northern region of Tarapaca, and said the strike would continue until then.

"We will sit down with them Monday," Reyes said. "But discussions will be based exclusively on issues discussed at the table when (previous) talks broke down." "The strike will go on.

Everyone is very expectant about what is going to happen. We will decide on our next measures (after the talks)." Collahuasi, which produced 535,000 tonnes of copper last year, was forced to halt operations on Saturday, a day after hundreds of subcontractors blocked access to the mine with burning tires and rocks to demand better working conditions and pay.

Port officials at the mine's exporting port of Puerto Patache said on Wednesday that shipments had not been affected by the protest and that a ship was waiting to be loaded with copper from the mine.

Global miners Anglo American (AAL.L) and Xstrata (XTA.L) each own a 44 percent stake in Collahuasi. A Japanese consortium led by Mitsui & Co (8031.T) is a minority stakeholder.

Mining companies face a growing risk of more protests if they fail to raise benefits and improve conditions for thousands of part-time workers who are needed for operations in a country that extracts a third of the world's mined copper.

However, Chile's Codelco, the world's top copper producer, said on Thursday there no signs of problems with its own subcontractors following the protest at Collahuasi. Codelco Chief Executive Officer Jose Pablo Arellano said operations were normal.

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