July 22, 2011 / 5:25 AM / 8 years ago

UPDATE 4-Escondida mine workers start one-day strike: union

(Adds BHP comment)

* Strike called for 24 hours, could be extended-union

* Stoppage comes just days after Codelco general strike

* Action raises fear of contagion to other private mines

* Union says conflict is due to contract disagreements

By Fabian Cambero and Alonso Soto

SANTIAGO, July 21 (Reuters) - Union workers at the world’s top copper mine, Chile’s Escondida, started a 24-hour strike on Thursday over a series of wage contract demands that if not met could lead to an indefinite work stoppage, union leaders told Reuters.

Union president Jose Vidal said workers preparing for a new shift at mine will be bused back home tonight.

The strike comes on the heels of a 24-hour stoppage by workers at Chile’s Codelco , the world’s top copper miner, and further raises fears of more labor strife in the mining powerhouse that could help push copper prices back to record highs.

The stoppage at Escondida could further strain global supply that has been repeatedly hit by bouts of bad weather, contractors’ protests and labor action in Chile, the world’s top producer of the metal.

The mine, which produced 1.1 million tonnes of copper last year or about 6.8 percent of the world’s mined copper, is majority owned by BHP Billiton .

A BHP spokesperson declined to comment and said any impact on production would be revealed in the company’s next quarterly production report.

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

The strike is unlikely to last more than a day given the risk of reprisal by companies, senior union officials and labor experts said. Companies can legally fire workers who miss two straight days of work, according to Chilean law.

At the heart of the strike is the way the mine operator calculates workers’ production bonuses after years of consecutive annual output drops due to dwindling ore grades, union leaders said.

If the union is able to pressure BHP to bow to its demands, it could prompt workers at other private mines to try similar strategies, said union officials at other mines who asked for anonymity.

CONTAGION RISK

Eduardo Roco, vice president of the Mining Federation, an umbrella group that gathers 11,000 union workers at private mines, said the strike at Escondida was not part of a wider scheme for stoppages at other deposits.

Union leaders at several copper mines in Chile told Reuters they had no plans to strike.

“This is struggle that will keep growing because society is complaining about how the country’s riches are falling into private hands,” said Raimundo Espinoza, head of the 16,000-strong federation of Codelco workers who went on strike on July 11.

“Other unions are following our lead.”

Thousands of Codelco workers downed tools for a day to protest a restructuring of Codelco that they say could lead to massive layoffs and threaten the state ownership of world-class deposits in Chile.

Codelco contract workers have also threatened strikes of their own to demand more benefits.

Escondida union leaders said BHP has not addressed their contract demands after repeated meetings and workers have grown increasingly impatient.

Production at Escondida has fallen over 26 percent after reaching an all-time output record of 1.48 million tonnes in 2007, according to data from the Chilean government.

BHP said this week it expects production at the massive deposit to start improving after it moves some activities closer to higher-grade areas.

The mine has increased its mineral resources after years of exploration that BHP said will allow Escondida to keep “its position as the world’s leading copper mine for decades to come.” (Additional reporting by Sonali Paul in MELBOURNE; Editing by David Gregorio and Lisa Shumaker)

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