Copper falls as Chilean labour worries ease

Chile’s state-owned copper giant Codelco has avoided a strike with two more of the six unions at its operations.

That leaves only the largest union union No. 1 without a negotiated contract.

The agreement is with union’s No. 2 and No. 3 who represent roughly 3,200 workers and includes a 3.8% raise and a US$15,000 bonus for each worker.

Union No. 1 will vote on an offer similar to that accepted by the other unions on Dec. 20.

Three other smaller unions had already reached contract deals.

Chile is the world’s largest producer of copper, turning out roughly 35% of the global supply — Codelco produced over 6% of the world’s copper last year.

Other news from Chile on Dec. 20 saw Xstrata (XTA-L) negotiating an end to a strike at its Altonorte copper smelter.

Some 340 workers at the plant, which last year produced nearly 300,000 tonnes of copper, walked out on Dec. 18 angered over pay and benefits. The deal will see the workers get and 8% pay raise over three years.

In London on Dec. 20 Xstrata was down 29 pence or roughly 1% to 2,477 pence on 6.2 million shares.

News of the aversion of the strikes, along with rising copper inventories and slower U.S. growth were seen as the many drivers behind the copper price falling to a six-month low. The metal was trading at US$2.94 a lb. midday in New York.

London Metal Exchange reports that inventories have gained close to 60% in the past two months and copper prices have fallen 27% since record highs in May.