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UPDATE 4-Workers at Chile's Escondida copper mine to strike Thursday -union
February 7, 2017 / 3:30 PM / 9 months ago

UPDATE 4-Workers at Chile's Escondida copper mine to strike Thursday -union

(Adds BHP Billiton’s comments)

By Fabian Cambero

ANTOFAGASTA, Chile, Feb 7 (Reuters) - Workers are set to strike on Thursday at BHP Billiton Plc’s Escondida copper mine after contract talks mediated by the Chilean government failed to reach a deal, the main union at the world’s largest copper mine told Reuters.

The union has warned that a strike at the Chilean copper mine could be lengthy, potentially affecting global supplies of a metal used in everything from construction to telecommunications.

BHP Billiton said it planned to halt production during the strike since it could not guarantee the safety of the 80 workers the government had authorized to remain at the mine to perform “critical duties”, such as equipment upkeep and adherence to environmental protocols.

“The company doesn’t want to change its position, so we understand that there is nothing left to negotiate ... there is nothing left to talk about, we’ve already talked a lot and we are definitely going on strike,” union spokesman Carlos Allendes said on Tuesday.

The strike is planned to start at 8 a.m. (1100 GMT) on Thursday.

“We’ve decided not to replace workers, at least during the first 15 days of the strike. With complete conviction, we have accepted that we will not be producing during this phase because the safety of our workers cannot be guaranteed during a strike,” said Patricio Vilaplana, Escondida’s vice-president of corporate affairs.

Copper prices have spiked in recent weeks over fears of a strike at Escondida, which produced 6 percent of the world’s supply in 2015. One tonne of copper was trading at $5,795.00 at 7:18 p.m. local time (1018 GMT), up from a morning low of $5,786.

The two sides on Friday started a five-day government-mediated period of negotiations that effectively delays a work stoppage the Escondida Union No. 1 voted for last week.

A strike can only legally begin on Thursday since Wednesday will be the last day of the scheduled negotiations if talks are not actually held. If there is a sudden change of heart, both parties can agree to an extension.

Allendes warned that the union has decided not to sit down to negotiate with the company on Wednesday.

“There will be no talks tomorrow,” Allendes said.

In a statement on Monday, the union said BHP had not committed to a benefits scheme that places new and longtime workers on equal footing. The union, which considers equality of benefits essential to any agreement, added that it tried to discuss the issue with the company, which asked to put it off to the end of negotiations.

Labor negotiations at Escondida, which have a long history of being tricky, are seen as a benchmark for the industry at large. The last wage talks four years ago, when copper prices were considerably higher, ended with Escondida offering each worker a bonus worth some $49,000, the highest ever offered in Chile’s mining industry.

Falling profits at Chile’s copper mines because of lower prices of the metal have caused belt-tightening that makes labor negotiations more difficult. Labor problems at Escondida could portend tough negotiations this year at other Chilean copper mines, such as Anglo American and Glencore’s Collahuasi and Antofagasta’s Los Pelambres.

Escondida is majority-controlled by BHP, with Rio Tinto and Japan’s JECO also holding stakes. (Reporting by Fabian Cambero; Additional reporting by Gram Slattery & Anthony Esposito; Writing by Anthony Esposito & Gram Slattery; Editing by Grant McCool and Alan Crosby)

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