UPDATE 2-Anglo halting Chile Los Bronces mine operations due to protest

Mon Mar 24, 2014 6:56pm EDT

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(Adds union, context on Chilean mining, analyst quote)

SANTIAGO, March 24 (Reuters) - Global miner Anglo American Plc said on Monday it was halting operations at its Los Bronces copper mine in central Chile because of a violent protest by contract workers.

Los Bronces, perched high in the Andes near Santiago, produced 416,300 tonnes of copper last year, roughly 7 percent of Chile's overall output.

In the early hours of Monday, contract workers launched a protest over what they say are layoff threats and the London-listed miner's refusal to negotiate a series of demands. It is unclear how long the labor action could last.

Still, a union leader said there was interest in reaching agreement with the company to resolve the dispute.

The demonstrators set tires on fire, damaged installations and looted during the protest, according to Anglo.

The protests highlight growing tensions with contract workers, who are usually paid less than their staff counterparts for similar work, at a time when Chile's mining boom is slowing.

"The issue with contract workers explodes once in a while," said Juan Carlos Guajardo, the head of mining think tank CESCO.

He stressed, however, "the violence is very concerning. It's generating more and more complications in Chilean mining ... I think we could see more cases like these."

Chile has been hit by massive mining strikes in the past, especially when copper prices were higher and workers were seeking a bigger share of the pie.

LOS BRONCES HALTED

Anglo American said on Monday afternoon it had been forced to halt operations because of the protests.

"The process of halting the mineral-processing plants has started, and once finished the evacuation of workers will begin, in so far as we have safety guarantees for the internal and external roads," Anglo said in a statement, adding it had asked for authorities' help.

All of Los Bronces' roughly 4,000 contract workers are mobilized, according to Manuel Ahumada, president of the CTC umbrella union.

The company's Chilean Twitter account posted a picture of hooded men wheeling gigantic tires and another one showing black smoke billowing from a fire that appeared to be engulfing a row of tires.

"Violence is also generated with fear, over-exploitation and precarious situations," he said. "We must also look at the brutal violence in over-exploiting workers."

Anglo owns 50.1 percent of the deposit. Chilean state miner Codelco and Japanese trading houses Mitsui & Co and Mitsubishi Corp also have stakes in the complex.

Anglo American's other mines in Chile are operating normally, the company added. (Reporting by Alexandra Ulmer; Editing by Steve Orlofsky and Chris Reese)

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