Home / Metal News / Copper / UPDATE: Chile Escondida Strike Continues, Union Awaits Offer
UPDATE: Chile Escondida Strike Continues, Union Awaits Offer
Aug 2,2011 10:31CST
industry news
A now 11-day-old strike at Chile's Escondida mine kept the world's biggest copper mine at a standstill Monday morning.

Aug 01, 2011 (Dow Jones Commodities News via Comtex) -- --Strikers await new company offer to end stoppage

--Workers from other companies threatening to joint strike

--Escondida losing some 3,000 metric tons copper a day on strike

(Updates with legal status of strike and threats from other workers to join stoppage.)

SANTIAGO (Dow Jones)--A now 11-day-old strike at Chile's Escondida mine, controlled and operated by global mining company BHP Billiton Ltd. (BHP, BHP.AU), kept the world's biggest copper mine at a standstill Monday morning, said a union representative.

Unionized workers at Escondida--which represented nearly 7% of global copper output and some 20% of Chile's copper production in 2010, according to state copper commission Cochilco's annual report--put down their tools late on July 21 to protest what they call unmet contract terms.

Last Wednesday, the company declared force majeure--a contract term that allows a company to temporarily halt its commitments due to an event beyond its control--on its copper concentrate shipments because of the strike.

"We're hoping the company will come to us with a better offer. We want this to get resolved sooner rather than later, but haven't heard from the company today," union treasurer Jaime Tejada told Dow Jones Newswires.

On Friday, the 2,375-strong Escondida union rejected the company's latest bonus offer, which it said was slightly lower than a previous offer.

Escondida company representatives weren't available for comment.

Before the strike began, Escondida proposed a 2.8 million peso ($6,120) per-worker bonus, but workers rejected the offer as they wanted CLP5 million due to higher international copper prices.

Over the weekend, the regional labor office ruled that the strike was illegal, which allows Escondida to fire workers for not showing up to their posts for two consecutive days, according to local legislation.

The union had declared the strike legal on the grounds that it is still negotiating terms of the 2009 contract, while the mining company had deemed it illegal.

Union leaders recently said the strike could turn violent if employees are fired and workers from other private and state-held mines have threatened to join the stoppage if Escondida fires strikers.

Chilean mines have seen labor unrest recently as workers at state copper giant Corporacion Nacional del Cobre held the first general strike in 18 years on July 11. On Saturday, unionized workers at the Collahuasi mine downed their tools for 24 hours to protest contract talks.

Workers at both Codelco, as the state miner is known, and Collahuasi have threatened to join Escondida's strike if workers are fired.

Escondida stands to lose some 3,000 metric tons of copper production a day on the work stoppage.

BHP Billiton holds a controlling 57.5% stake in Escondida, while Rio Tinto PLC (RIO, RIO.LN) holds 30%. The remaining 12.5% is held by a Japanese consortium led by Mitsubishi Corp. (MSBHY, 8058.TO).

Global diversified mining companies Xstrata PLC (XTA.LN) and Anglo American PLC (AAUKY, AAL.LN) each hold a 44% stake in Collahuasi, while a consortium led by Mitsui & Co. (MITSY, 8031.TO) holds the remaining 12%.

Chile is the world's biggest copper producer, accounting for a third of global supply.



For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news