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7 August, 2006
Copper Miners in Chile at Minera Escondida Ltda. were set to strike today, at 08h00, following an unacceptable wage offer made by management on Friday, 4 August. With 8% of the world’s copper supply originating from Escondida in northern Chile, this dispute is being watched closely because it could send copper prices to new highs.
Escondida Workers’ Union No. 1, representing over 2,000 copper miners, said over the weekend that an improved company offer still fell short of union demands. Management, led by BHP Billiton, had asked the government for the mandatory five-day cooling off period last week, making any strike before today illegal.
The company’s offer Friday raised a one-off traditional pay bonus for each worker to US$21,481 from US$15,000, but it held firm on its prior salary offer of 3% above Chile’s inflation rate. The proposal also promises social improvements in the community of Antofagasta, as well as interest-free loans to workers.
The union is seeking a 13% salary increase due to high inflation rates plaguing Chile’s booming mining areas. It also seeks zone allocation pay and a US$29,629 one-off bonus. Workers’ Union No. 1 also claims that management has failed to address certain conditions for working women, particularly truck drivers.
Any Escondida salary settlement is expected to be the defining pattern for upcoming wage and benefit negotiations with other mining enterprises in Chile, including bargaining units within huge state-run copper company Codelco.
Minera Escondida Ltda., with two open pit mines in Chile’s northern Region II, is 57.5% owned by BHP Billiton, 30% by Rio Tinto, 10% by a consortium of Japanese companies led by Mitsubishi, and 2.5% by the World Bank’s International Finance Corporation.