The world's biggest copper mine, Chile's Escondida, halted concentrate sales on Wednesday as a six-day strike showed no sign of ebbing, stoking fears about global supplies of the metal.
The surprise stoppage at Escondida was the latest in a wave of protests at mines from Asia to Africa as workers demand more from a bonanza in copper prices.
The mine operator said in a statement it declared force majeure — a clause that frees it of liability on delays in shipments — on most of its output. It said the length of the force majeure hinged on the strike.
The strike has sparked stoppage threats across mines in Chile, the world's top copper producer, but contagion fears eased on Wednesday after President Sebastian Pinera met with union members at state giant Codelco.
Escondida unions threatened to take over the deposit if owner BHP Billiton uses strikebreakers to resume operations at a mine that extracts about 7 percent of the world's copper.
"If the company tries to do that, the strike will turn into a takeover," said union leader Roberto Arriagada after filing a suit against the company for alleged illegal labor practices.
Chances of a prolonged stoppage grew as BHP has also dug in, dismissing any talks while workers continue with a strike it deems illegal and threatening to fire them.
The force majeure applies to sales of copper concentrate, the crushed, unrefined mineral. Concentrate represents about 72 percent of Escondida's annual output. The mine did not say what was the status of its copper cathode sales.
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Workers have demanded an $11,000 bonus linked to company earnings to compensate for a fall in production level compensation. The bonus is discretionary and not part of the collective agreement.
Despite the strike, copper prices actually fell on Wednesday as investors remained fearful of the health of the global economy after weak U.S. economic data. Copper prices in London fell 0.44 percent to $9,777 a tonne.
The last time Escondida workers downed tools in 2006, the strike had more influence on copper prices as the global economy was growing strongly and China was stepping up copper purchases.
The latest strike also comes just days after a walkout by workers at Codelco — the first in nearly 20 years — and six months following a month-long strike at Collahuasi, the world's No. 3 copper mine.
Collahuasi union workers have threatened stoppages of their own for benefits. They have agreed to continue talks with the operator of the mine, jointly owned by Xstrata and Anglo American , but have warned they could strike.
Tensions appeared to ease at Chile's Codelco, the world's No. 1 copper producer, after Pinera met with union leaders and reaffirmed his government would not privatize the state enterprise as workers fear.
"We are more at ease now," Julio Jalil, one of the leaders of Codelco's labor federation, told Reuters after the meeting. "But this is not over yet, he has to deliver on the promises he made to us."
Codelco unions are fighting to regain their influence in the company after CEO Diego Hernandez, former head of BHP base metals unit, started a deep restructuring of the state giant to better compete with leaner private rivals.
Earlier this week, Codelco also defused an immediate stoppage threat after agreeing to hold talks with thousands of contract workers demanding more benefits.
Any prolonged strike at Escondida could draw in workers from other private mines in a solidarity stoppage.
The Escondida strike marks a rare precedent among private mines in Chile where strict labor laws allow employers to fire workers who strike outside collective contract negotiations.
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Escondida settled a 44-month contract with workers in 2009, so the latest stoppage is a signal unions have a shorter fuse and have been encouraged by a raft of protests by miners, environmentalists and students against the government of increasingly unpopular Pinera.
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