Miners at Chile's Collahuasi strike, copper jumps

SANTIAGO, July 9 (Reuters) Copper mine workers today started a strike at Collahuasi, a mine that accounts for 8 per cent of Chile's copper output, and prices of the metal rose more than 2 percent within minutes.

Several hundred workers began their strike at 8 am (1730 hrs IST) after management and the mine's only union failed to reach an agreement over pay and conditions.

The news helped push the price of copper to two-month highs. Chile is the world's biggest copper producer, and Collahuasi produces 440,000 tonnes of copper per year or about 8 per cent of Chile's total.

Some 380,000 tonnes of the mine's copper is produced in concentrates and around 60,000 tonnes in cathodes, according to 2006 figures. Collahuasi also produced 3,362 tonnes of molybdenum last year.

Three hours after the strike started, a management spokesman said production was unaffected at the mine, 4,400 metres up in the Andes above the northern city of Iquique.

Asked how long the mine could operate as normal given the stoppage, he said: ''We don't know that. That's something to discuss in the next few days, but we have a plan which is allowing us to keep up our production of refined copper.'' Copper prices rose sharply on news of the strike, then eased off session highs. In London, copper MCU3> ended 1.6 per cent higher at 7,985 dollars per tonne, while in New York, copper for July delivery HGN7> was 1.5 per cent higher at 3.67 dollars per lb.

Collahuasi is majority-owned by global miners Xstrata Plc and Anglo American, each with a 44 per cent stake. The remaining 12 per cent is owned by a group of Japanese companies headed by Mitsui&Co Ltd.

Xstrata said in a statement it ''deeply regretted'' the strike.

''Collahuasi has developed a contingency plan that will prevent the interruption of its operational activities without compromising or threatening the safety of its people or the development of its operations,'' it said.

Earlier, trade union President Hernan Farias told Reuters workers and supporters planned to march through Iquique later on Monday to highlight their cause, although he added the union was still ready to negotiate.

''We're open to talks, and if they feel the same way then we're ready,'' he said.

Union leaders and managers spent last week in government-mediated talks.

The Collahuasi management company twice raised its initial pay offer from 3.2 per cent to 3.5 per cent and finally 4.0 percent, but workers demanded an 8 percent raise.

They also want improved health and education benefits, a housing stipend and a retroactive share of soaring company profits from 2005 and 2006, when copper prices were at record levels.

Reuters SBA VP0215