Escondida mine and striking union in talks

Escondida mine and striking union in talks

Sunday, August 13th 2006

Striking workers at the world’s largest copper mine, Chile’s Escondida, said on Saturday that negotiators trying to end a weeklong strike had not yet discussed the hard numbers needed for a salary deal.

“We’re still dealing with the social issues,” like warm food in the cafeteria, union Secretary Pedro Marin said.

Marin said talks could go on for days before coming up with a deal to replace a 2003 contract that expired August 2.

Talks between the sides resumed on Friday in the first firm step toward reconciliation since the strike started on Monday, sending international copper prices on a weeklong roller-coaster ride amid tight supplies.

Workers and Escondida, majority-owned by global miner BHP Billiton, are negotiating a three-year contract and the union wants a new salary and benefits offer that reflects copper prices.

Workers are asking for a 13 percent pay raise and a $30,000 per-worker bonus linked to high copper prices. That is far higher than the company’s latest offer for a 3 percent raise, a $15,000 bonus and soft loans.

The strike has cut production at Escondida by about 60 percent, costing the company millions of dollars a day and forcing it to declare force majeure on delivery of copper concentrates.

Union representatives and managers at the mine are meeting in a hotel in Antofagasta, the major city serving the Escondida mine and others in the mineral-rich region.

Mining strikes in Chile are typically very short-lived, although markets have worried Escondida’s may be an exception.

Talks were scheduled and canceled twice this week as workers said they would not return to the table unless the company improved its offer.

Escondida, also part-owned by Rio Tinto Ltd., produces about 1.3 million tonnes of copper per year, or 8 percent of world production and more than 20 percent of annual output in Chile, the world’s largest copper producing country.

Copyright © 2006 Reuters Limited. All rights reserved.

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