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24 July, 2006
In Chile, negotiations resumed 22 July between Escondida Workers’ Union No. 1 and Minera Escondida Ltd., owner of the world’s largest copper-producing mines. The union and company, primarily held by BHP Billiton and Rio Tinto, have been locked in a pay dispute since bargaining began on 21 June.
A current contract expires 2 August. The unaffiliated union, representing 2,052 workers, or 96% of Escondida’s workforce, issued a statement on 21 July that workers would vote on management’s latest salary offer on 28 July. Miners have already given authorisation for a strike if their pay demands are not met by then.
In early July, a company pay offer of 1.5% above Chile’s inflation rate enraged workers, resulting in work-to-rule actions in which strict adherence to all safety rules forced a 10% production reduction. The union is seeking a 13% pay adjustment, in addition to a one-off bonus for high copper prices coupled with an end-of-dispute bonus.
Record high copper prices and the fact that production from Escondida’s two massive open-pit mines in Chile’s northern Region II has risen nearly 15% increase over last year has given credence to the union’s demands. The union has argued that because of the mining boom, the cost-of-living in such places as Antofagasta near Escondida is 10% higher than anywhere else in Chile.
Minera Escondida Ltda. produced 1.27 million tonnes of copper and copper cathode last year, some 8% of the world’s total. The mine also produced 182,472 ounces of gold. BHP Billiton holds 57.5% of the company’s stock; Rio Tinto, 30%; a Japanese consortium led by Mitsubishi, 10%; and the World Bank’s International Finance Corp., 2.5%.