Chile mine labour dispute rattles copper market

LONDON, Aug 3 (Reuters) Worker rejection of the latest pay offer at the world's largest copper mine rippled through markets on Thursday, with traders saying if a walkout goes ahead next week prices could spike upwards.

The union at Chile's Escondida copper mine rejected the company's latest wage offer late on Wednesday, paving the way for a crippling strike next week.

Copper rose more than one percent in Asia after the union decision, but settled back when London markets opened. At 1030 GMT, copper for delivery in three months on the London Metal Exchange

''The union wants 13 percent plus a bonus and the company is offering 1.5 percent. They are very far apart and although they are still talking, the difference is so great I think the strike will go ahead next week,'' a dealer in London said.

''Usually strikes in Chile are pretty short-lived but this time it could drag on.'' In addition to the strike threat at Escondida, workers at Inco Ltd's 54,000 tonne-per-year Voisey's Bay nickel mine in Canada walked out last week over pay.

''Escondida and Voisey's Bay are the main focus for metals,'' Sempra Metals economist John Kemp said.

''For markets more generally, the European Central Bank rate decision later today and the Federal Reserve next week will set the tone for these high risk asset classes,'' he added.

Analysts will watch U.S. jobs data on Friday, which could offer clues about whether the Federal Reserve will keep raising rates or take a pause from its two-year tightening campaign at its Aug. 8 meeting.

The Escondida mine, majority-owned by global miner BHP Billiton, has until Friday to reach a fresh deal with Escondida's more than 2,000 workers or a strike will begin on Monday.

''My sense is that producers are not keen to see disruptions affecting availability and thereby prices,'' a second London trader said.

''They are concerned that their reputation for reliability may be tarnished so are doing all they can to maintain deliveries.'' Nickel was lower after a hefty 744-tonne rise in LME stocks overnight to 5,076, but over half the total is earmarked for delivery with just 2,298 tonnes available to support the 1.3 million tonne-per-year market.

Last week the premium, known as backwardation, for cash metal above the price for metal delivered in three months dropped from LONDON, Aug 3 (Reuters) Worker rejection of the latest pay offer at the world's largest copper mine rippled through markets on Thursday, with traders saying if a walkout goes ahead next week prices could spike upwards.

The union at Chile's Escondida copper mine rejected the company's latest wage offer late on Wednesday, paving the way for a crippling strike next week.

Copper rose more than one percent in Asia after the union decision, but settled back when London markets opened. At 1030 GMT, copper for delivery in three months on the London Metal Exchange

''The union wants 13 percent plus a bonus and the company is offering 1.5 percent. They are very far apart and although they are still talking, the difference is so great I think the strike will go ahead next week,'' a dealer in London said.

''Usually strikes in Chile are pretty short-lived but this time it could drag on.'' In addition to the strike threat at Escondida, workers at Inco Ltd's 54,000 tonne-per-year Voisey's Bay nickel mine in Canada walked out last week over pay.

''Escondida and Voisey's Bay are the main focus for metals,'' Sempra Metals economist John Kemp said.

''For markets more generally, the European Central Bank rate decision later today and the Federal Reserve next week will set the tone for these high risk asset classes,'' he added.

Analysts will watch U.S. jobs data on Friday, which could offer clues about whether the Federal Reserve will keep raising rates or take a pause from its two-year tightening campaign at its Aug. 8 meeting.

The Escondida mine, majority-owned by global miner BHP Billiton, has until Friday to reach a fresh deal with Escondida's more than 2,000 workers or a strike will begin on Monday.

''My sense is that producers are not keen to see disruptions affecting availability and thereby prices,'' a second London trader said.

''They are concerned that their reputation for reliability may be tarnished so are doing all they can to maintain deliveries.'' Nickel was $50 lower after a hefty 744-tonne rise in LME stocks overnight to 5,076, but over half the total is earmarked for delivery with just 2,298 tonnes available to support the 1.3 million tonne-per-year market.

Last week the premium, known as backwardation, for cash metal above the price for metal delivered in three months dropped from $2,700 to $1,100, but has since jumped back to $2,300, signifying limited availability.

LME aluminium was down $24 at $2,526 and zinc was down $10 at $3,410. Spot gold was down at $645.25/646.95 an ounce versus $650.70/651.45 late in New York.

Rio Tinto Ltd./Plc., the world's second-largest mining firm, posted a better-than-expected 80 percent leap in first-half profit on strong demand for minerals worldwide, which it said shows little sign of easing.

But shares in the company on London's FTSE index were down just under one percent at 2,785 pence, along with most other mining equities.

REUTERS CS ,700 to ,100, but has since jumped back to LONDON, Aug 3 (Reuters) Worker rejection of the latest pay offer at the world's largest copper mine rippled through markets on Thursday, with traders saying if a walkout goes ahead next week prices could spike upwards.

The union at Chile's Escondida copper mine rejected the company's latest wage offer late on Wednesday, paving the way for a crippling strike next week.

Copper rose more than one percent in Asia after the union decision, but settled back when London markets opened. At 1030 GMT, copper for delivery in three months on the London Metal Exchange

''The union wants 13 percent plus a bonus and the company is offering 1.5 percent. They are very far apart and although they are still talking, the difference is so great I think the strike will go ahead next week,'' a dealer in London said.

''Usually strikes in Chile are pretty short-lived but this time it could drag on.'' In addition to the strike threat at Escondida, workers at Inco Ltd's 54,000 tonne-per-year Voisey's Bay nickel mine in Canada walked out last week over pay.

''Escondida and Voisey's Bay are the main focus for metals,'' Sempra Metals economist John Kemp said.

''For markets more generally, the European Central Bank rate decision later today and the Federal Reserve next week will set the tone for these high risk asset classes,'' he added.

Analysts will watch U.S. jobs data on Friday, which could offer clues about whether the Federal Reserve will keep raising rates or take a pause from its two-year tightening campaign at its Aug. 8 meeting.

The Escondida mine, majority-owned by global miner BHP Billiton, has until Friday to reach a fresh deal with Escondida's more than 2,000 workers or a strike will begin on Monday.

''My sense is that producers are not keen to see disruptions affecting availability and thereby prices,'' a second London trader said.

''They are concerned that their reputation for reliability may be tarnished so are doing all they can to maintain deliveries.'' Nickel was $50 lower after a hefty 744-tonne rise in LME stocks overnight to 5,076, but over half the total is earmarked for delivery with just 2,298 tonnes available to support the 1.3 million tonne-per-year market.

Last week the premium, known as backwardation, for cash metal above the price for metal delivered in three months dropped from $2,700 to $1,100, but has since jumped back to $2,300, signifying limited availability.

LME aluminium was down $24 at $2,526 and zinc was down $10 at $3,410. Spot gold was down at $645.25/646.95 an ounce versus $650.70/651.45 late in New York.

Rio Tinto Ltd./Plc., the world's second-largest mining firm, posted a better-than-expected 80 percent leap in first-half profit on strong demand for minerals worldwide, which it said shows little sign of easing.

But shares in the company on London's FTSE index were down just under one percent at 2,785 pence, along with most other mining equities.

REUTERS CS ,300, signifying limited availability.

LME aluminium was down at LONDON, Aug 3 (Reuters) Worker rejection of the latest pay offer at the world's largest copper mine rippled through markets on Thursday, with traders saying if a walkout goes ahead next week prices could spike upwards.

The union at Chile's Escondida copper mine rejected the company's latest wage offer late on Wednesday, paving the way for a crippling strike next week.

Copper rose more than one percent in Asia after the union decision, but settled back when London markets opened. At 1030 GMT, copper for delivery in three months on the London Metal Exchange

''The union wants 13 percent plus a bonus and the company is offering 1.5 percent. They are very far apart and although they are still talking, the difference is so great I think the strike will go ahead next week,'' a dealer in London said.

''Usually strikes in Chile are pretty short-lived but this time it could drag on.'' In addition to the strike threat at Escondida, workers at Inco Ltd's 54,000 tonne-per-year Voisey's Bay nickel mine in Canada walked out last week over pay.

''Escondida and Voisey's Bay are the main focus for metals,'' Sempra Metals economist John Kemp said.

''For markets more generally, the European Central Bank rate decision later today and the Federal Reserve next week will set the tone for these high risk asset classes,'' he added.

Analysts will watch U.S. jobs data on Friday, which could offer clues about whether the Federal Reserve will keep raising rates or take a pause from its two-year tightening campaign at its Aug. 8 meeting.

The Escondida mine, majority-owned by global miner BHP Billiton, has until Friday to reach a fresh deal with Escondida's more than 2,000 workers or a strike will begin on Monday.

''My sense is that producers are not keen to see disruptions affecting availability and thereby prices,'' a second London trader said.

''They are concerned that their reputation for reliability may be tarnished so are doing all they can to maintain deliveries.'' Nickel was $50 lower after a hefty 744-tonne rise in LME stocks overnight to 5,076, but over half the total is earmarked for delivery with just 2,298 tonnes available to support the 1.3 million tonne-per-year market.

Last week the premium, known as backwardation, for cash metal above the price for metal delivered in three months dropped from $2,700 to $1,100, but has since jumped back to $2,300, signifying limited availability.

LME aluminium was down $24 at $2,526 and zinc was down $10 at $3,410. Spot gold was down at $645.25/646.95 an ounce versus $650.70/651.45 late in New York.

Rio Tinto Ltd./Plc., the world's second-largest mining firm, posted a better-than-expected 80 percent leap in first-half profit on strong demand for minerals worldwide, which it said shows little sign of easing.

But shares in the company on London's FTSE index were down just under one percent at 2,785 pence, along with most other mining equities.

REUTERS CS ,526 and zinc was down at ,410. Spot gold was down at 5.25/646.95 an ounce versus 0.70/651.45 late in New York.

Rio Tinto Ltd./Plc., the world's second-largest mining firm, posted a better-than-expected 80 percent leap in first-half profit on strong demand for minerals worldwide, which it said shows little sign of easing.

But shares in the company on London's FTSE index were down just under one percent at 2,785 pence, along with most other mining equities.

REUTERS CS