Chile Strike Shuts Down World's Largest Copper Mine

Posted 08 August 2006 @ 06:01 am EET     Print     Reprint     E-Mail     Comments

SANTIAGO (AP) - Workers struck the world's largest copper mine, jeopardizing eight percent of global production and spurring prices to a three-week high. "This is the first real strike in the company's history. We do not know how it will turn out, but we are ready to hang in there," said Pedro Marin, a trade union spokesman at the Escondida mine that belongs to the Anglo-Australian giant BHP Billiton.

Escondida miners did not show up for their 8:00 am (1200 GMT) shift. Workers overnight turned off the engines of mineral processing equipment. Escondida is located some 1,300 kilometers (1,865 miles) north of the capital Santiago in the Atacama desert. It saw a stoppage in 2003, which lasted only a few hours.

More than 2,000 workers at the mine are demanding a 13-percent pay raise and a 30,000 dollar bonus, which they say reflects a tripling in global copper prices since the previous collective bargaining agreement reached three years ago. The workers turned down a last-minute company offer on Friday of a three percent pay raise and a 16,000 dollar bonus per miner.

Escondida produces on average 125,000 tonnes of copper per year, nearly 20 percent of total production in Chile, the world's largest copper producer. Copper accounts for nearly 2.5 percent of the country's gross national product. Main customers are Japan, Germany, Canada, China, Sweden, Brazil, South Korea and France.

The strike had been brewing for weeks, and the news did not take global markets by surprise. In London, trading the price of copper rose to more than 8,000 dollars per tonne for the first time in three weeks. Both sides were keeping to their stands late Monday. Copper miners are some of the highest wage earners in Chile, reflecting the industry's importance to the economy.

A top mine spokesman, Mauro Valdes, called the strike "inexplicable" because the company will incur daily losses of 15 million dollar on the company and drain the state's coffers of seven million dollars per day. But the strikers accused the company of being unreasonable while swimming in profit.

"The company is taking a very hardline position," Marin said. "There is no business more profitable than this one" in the Latin American country, the labor union spokesman said. "We are only asking for one percent of the net profits. If Escondida does not have the means (to meet our demands) than no one has them." Workers said copper prices rose from 80 cents to three dollars per pound in the three years since the previous negotiations.