BHPs Chilean Copper Union Says Wage Offer Too Low

BHPs Chilean Copper Union Says Wage Offer Too Low

A union at BHP Billiton Plc, the world’s biggest mining company, said the latest wage offer from management at a Chilean copper mine is too low.

BHP today offered a union at its Cerro Colorado copper mine in Chile a wage increase of 2 percentage points above inflation, below the union’s request for a 7 percentage-point increase, said Mario Yanez, the union’s president. The two sides are working to reach an accord and avert a strike at the mine before the current contract expires Jan. 30.

“We haven’t made as much progress as we had expected,” Yanez said in a phone interview from northern Chile. He said he expects workers to reject the offer. “The offer is very low.”

Workers are seeking a wage increase after copper prices climbed 41 percent in 2006, fueled by rising demand and supply disruptions, including a labor strike that cut output at BHP’s Escondida, the world’s largest copper mine. Copper prices this year have dropped 11 percent as supplies increased.

Prices rose today after China, the world’s largest user of the metal, boosted imports. Futures for March delivery rose 5 cents, or 2 percent, to close at $2.5795 a pound on the Comex division of the New York Mercantile Exchange.

The Chilean Copper Commission, a state-run research group, estimates that Cerro Colorado will produce 120,000 metric tons of copper this year, or 2.1 percent of total copper output from Chile, the world’s biggest producer of the metal.

The union represents 535 workers at Cerro Colorado, or 98 percent of the mine’s workforce, Yanez said.

The company also offered to pay a bonus per worker of about 4 million pesos ($7,400), Yanez said. The union wants each worker to receive 8 million pesos, he said.

Alejandra Wood, a spokeswoman for BHP in Santiago, confirmed the offer. She declined to comment on whether there would be another offer.

The company on Jan. 3 had offered to increase wages only to keep pace with inflation, which was 2.6 percent in the 12 months through December.


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