UPDATE 1-Chile Escondida workers to vote on pact in late January

Tue Jan 15, 2013 10:15am EST

* Voting to start on Jan. 24, end on Jan. 28

* Escondida is world's No.1 copper mine

* New contract would ease fears of labor unrest

SANTIAGO, Jan 15 (Reuters) - Workers at Chile's Escondida, the world's largest copper deposit, will start to vote on a new contract proposal next week, a union leader told Reuters on Tuesday, after rejecting a previous offer in December.

Voting will start on Jan. 24 and the entire process will be over on Jan. 28, union head Marcelo Tapia told Reuters.

If the proposal is accepted this time, Escondida, controlled by BHP Billiton , will sign a fresh wage deal and soothe fears of labor action.

If workers again turn down the offer, the process of early contract talks will be considered terminated and the standard negotiation procedure will begin at mid-year in the run-up to the contract's expiration on July 31.

The offer entails a 5 percent nominal salary readjustment, as well as bonuses and benefits for a total of roughly 23 million pesos (around US$48,665) per worker, union leaders said.

"This is a historic proposal in Chilean mining," Tapia said. "The offer is a lot better (than the previous one) ... but I don't have any expectations. I can't make recommendations."

BHP declined to comment.

Escondida's union stunned the copper market in 2011 by staging a two-week strike, sending the mine's output tumbling and raising the specter of an increase in labor action.

The mine's third-quarter output last year surged 72.4 percent from 2011 levels to 253,800 tonnes, boosted by better ore grades and a low base of comparison. Output in the January-September period was 787,000 tonnes, up 31.6 percent from a year earlier.

Workers at the giant Chuquicamata mine, owned by Chile's state-run copper firm Codelco, said in December they had accepted a wage offer, soothing fears of labor unrest. Chile is the world No. 1 copper producer.

BHP and Rio Tinto , which owns 30 percent of Escondida, have approved plans for a $4.5 billion expansion of the mine to boost output.