Aug 04, 2011 (Dow Jones Commodities News via Comtex) -- --Strike at Escondida now in its 14th day; mine is losing 3,000 metric tons copper a day
--Management hasn't sweetened production-bonus offer to end strike
--Union could vote on bonus offer later Tuesday
(Adds additional comments on the bonus offer, in the fifth, seventh and ninth paragraphs.)
DOW JONES NEWSWIRES
SANTIAGO (Dow Jones)--Striking unionized workers at the Escondida mine in northern Chile are reviewing management's bonus offer and mulling whether to accept it and put an end to the 14-day work stoppage, a union leader said Thursday.
Workers of the 2,375-strong union downed their tools on July 21 to protest what they deemed to be unmet contract terms, forcing Escondida, which accounts for 7% of annual global copper output, to lose an estimated 3,000 metric tons of the red metal a day.
Last Wednesday, the company declared a 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.
"The union is reviewing the company's latest offer. We haven't decided yet if we're going to put it to a vote," union director Luis Valdes said, without specifying the new offer's terms.
According to an internal Escondida document, the offer is the same one management made last week, which totals a gross 2.6 million pesos ($5,640). The sole union at the mine has been seeking a CLP4 million bonus because of sky-high international copper prices.
The union will hold a general assembly later Thursday to inform workers of the offer and possibly put it to a vote, the union's website said.
Copper-market participants in Chile are paying close attention to the Escondida strike to see if it will set a precedent regarding negotiations.
Chile is the world's largest copper producer, accounting for one-third of global supply.
The company, in its internal statement, said it is "its duty to take the necessary measures to resume operations and guarantee the right to work." This could include firing strikers.
According to Chilean labor laws, mine strikes are legal only when regulated contract negotiations fall through.
A regional government labor office recently ruled the strike illegal because there is no ongoing regulated collective-bargaining process.
Global diversified miner BHP Billiton Ltd. (BHP, BHP.AU) has a controlling 57.5% stake in Escondida and operates the mine, while Rio Tinto PLC (RIO, RIO.LN) holds another 30%. The remaining 12.5% is held by a Japanese consortium led by Mitsubishi Corp. (MSBHY, 8058.TO).
Escondida produced 1.09 million tons of copper in 2010.