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The Globe and Mail

Strike at world’s biggest copper mine drags on as mediation bid fails

A five-day strike at the world's biggest copper mine, Chile's Escondida, looked set to drag on after the mine on Tuesday snubbed a government mediation bid, amid fears labour unrest could spread in the sector.

Escondida, majority owned by BHP Billiton Ltd. , dug in on Tuesday, refusing an invitation by the state labour authority in the northern city of Antofagasta for talks with striking workers and taking a hard line that risks prolonging the disruption.

The Escondida stoppage is the latest in a series of strikes from Chile to Indonesia by miners demanding a bigger slice of a copper price bonanza.

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It also comes just six months after a month-long strike at the world's No. 3 copper mine, Chile's Collahuasi, the longest-ever at a major private mine in the country.

Escondida, which produces nearly 7 per cent of the world's mined copper, said it would not talk to workers as long as they continued their strike to demand bonuses linked to company earnings to offset a fall in production compensation after years of consecutive annual output drops on lower ore grades.

However, the union workers extended an olive branch on Tuesday, asking the labour authority to issue a fresh invitation for talks.

"The company did not attend the meeting today, but the union has asked for a second meeting on Thursday to resume dialogue as a way to solve the conflict," said Marcelo Pizarro, head of the Antofagasta labour authority.

Escondida could stand to lose production of about 3,000 tonnes per day during the strike, which Tuesday boosted copper prices to their highest level in a week.

The Escondida strike marks a rare precedent among private mines in Chile where strict labour laws allow employers to fire workers who strike when they are not in scheduled collective contract negotiations.

Escondida settled a 44-month contract with workers in 2009, so the latest stoppage is a signal unions have an increasingly short fuse and have been emboldened by a raft of protests by miners, environmentalists and students against the government of increasingly unpopular centre-right President Sebastian Pinera.

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Around 9,000 subcontract workers were due to join the protest Tuesday.

Unionists at Codelco and other private mines have threatened to join the Escondida workers' protest if strikers are sacked.

Workers at the world's No. 3 copper mine, Collahuasi, which is jointly owned by global miners Xstrata and Anglo American, have also threatened to join the protest to make demands of their own.

Union leaders say Escondida is near declaring force majeure – a contract clause that frees it of liability on shipment delays – on copper sales.

Persistent labour unrest could tarnish Chile's reputation as one of the region's most stable investment destinations and further disrupt global supply of the red metal, which has already taken a hit from strikes and bad weather this year.

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