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Tensions rise as strike hits world's top copper mine

Feb 13 2017 17:01
Laura Millan Lombrana, Bloomberg News with AFP
A strike over pay has halted production at the wor

A strike over pay has halted production at the world's largest copper mine, Escondida, operated by BHP Billiton in the Antofagasta region, Chile. (File, AFP)

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Santiago - BHP Billiton [JSE:BIL], owner of the world’s top copper mine, said it will take legal action after a group of about 300 people entered the Escondida mine during a strike and forced some contractors to abandon the site.

People with their faces covered entered the mine site at 6pm Santiago time on Saturday, threatening the staff of contract companies and setting off fire alarms, causing damage, the Melbourne-based company said in an emailed statement on Sunday.

A smaller group cut power to security cameras, it said.

The union, whose 2 500 members stopped work on Thursday after wage talks broke down, has set up a makeshift camp just outside the mine.

Union President Patricio Tapia said while a group of members did enter the mine site, they marched peacefully around the contractor workers’ camp and left. They didn’t trigger alarms or break anything, Tapia said by phone on Sunday.

The incident is the latest in a tense first five days of a strike that helped propel the price of copper to its biggest gain in almost four years on Friday, after Escondida declared force majeure on its shipments and a fire broke out in another dormitory area for contractors.

The union denied any involvement.

The mine supplies 5% of global copper output - some one million tons a year - and a long strike could cause shortages.

Prices added 0.5% to $6 122 ton in London on Monday, the highest since May 2015.

Escondida accuses the union of sending fewer workers than authorised for a skeleton crew during the strike, thereby jeopardising mine safety, as well as blocking access to contract companies.

The union says it’s adhering to labour rules governing the skeleton crew and is blocking roads to prevent thieves and strike breakers from entering the site.

"We categorically reject these acts that not only infringe company values but also the law, and put at risk the safety of our people," Escondida Corporate Affairs Vice President Patricio Vilaplana said in the statement.

"As a result, the company will use all necessary resources and take the pertinent legal actions to guarantee the safety of all workers."

The striking workers told AFP they were prepared to hold out for two months in their bid for higher salaries.

"Our spirits are high. We're (picketing) in two shifts and demonstrating that we're ready to hold out for two months," Tapia told AFP.

Workers of the world's largest copper mine, BHP Bi

Workers of the world's largest copper mine, BHP Billiton's Escondida in Chile, camp as they start an indefinite strike in Antofagasta. The strike over pay has prompted concerns on world commodity markets. (Juan Rivas, AFP)

The workers say they have a war chest of $389 000 to sustain the strike.

Their longest strike to date lasted 25 days, in 2006.

BHP Billiton, an Anglo-Australian mining giant, has rejected workers' demands for a 7% raise and bonuses of 25 million pesos (around $39 000).

It is offering bonuses of eight million pesos, with no raise.

The company has announced it will halt the mine for at least the first 15 days of the strike.

Analysts say a one-month strike at Escondida would cause a sharp rise in copper prices - and also cost Chile, the world's top copper producer, 0.2% of gross domestic product this year.

- Bloomberg, AFP

Read Fin24's top stories trending on Twitter:

bhp billiton  |  copper  |  labour unrest  |  commodities  |  mining


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