UPDATE:Zambia Chambishi Copper Smelter Workers Strike,Output Halted

Mar 26, 2011 (Dow Jones Commodities News Select via Comtex) -- Workers at Chinese-owned Chambishi Copper Smelter went on strike Friday over a pay dispute forcing management to halt output at the plant, a union official said Saturday.

At least 600 workers refused to enter the plant after rejecting a 12% pay rise offered by management, said Sikufela Mundia, the president of the National Union of Miners and Allied Workers.

"Output has been halted, the workers are demanding for a 50% pay rise," he said.

Management is in touch with union representatives and a meeting is being arranged this weekend to resolve the stand-off, a company spokesman said Saturday.

The Zambian police deployed at the smelter Friday to quell a possible riot after the workers gathered outside the plant to stage a demonstration, people close to the situation said.

Industry officials say that the strike is likely to affect the operations of several companies that use the smelter for treatment of copper concentrates.

The 150,000 tons-a-year smelter processes copper concentrates from the Chinese-owned Chambishi Copper Mine as well as concentrates produced by Equinox Minerals Ltd.'s (EQN.T, EQXMF) Lumwana Copper Mines, First Quantum Minerals Ltd.'s (FM.T, FQVLF) Kansanshi Copper Mines and Metorex Ltd.'s (MTX.JO, MRXLY) Chibuluma Copper Mines.

Chambishi Smelter is owned by NCFA Mining, a unit of a China Nonferrous Metals Co. (8306.HK) subsidiary.

In recent years, Chinese-owned enterprises have invested heavily in Zambia's copper mining sector in search of resources for resource-hungry China. The enterprises' labor policies, however, remain unpopular among miners' unions and opposition politicians.