Union steps up pressure at Escondida

Workers at Escondida are increasing their efforts to slow production at the world’s largest copper mine.

If production is cut, experts say global supply would be affected and copper prices would rise higher.

Escondida accounted for 8.5% of global copper output from mines last year.

On July 25 some 2,000 workers shunned the habit of getting to work before their shift a practice that allows for smoother shift changes.

“Our protest has broadened,” Pedro Marin, the union secretary, told Reuters. “This hurts the coordination of the mine operations, which produces delays.”

The latest tactic is aimed at applying pressure on management to improve the unions contract offer before the strike deadline arrives.

Marin has said union tactics have decreased output by 25% since July 7 — when miners began to protest.

But BHP Billiton (BHP-N, BLT- L) spokesperson Alejandra Wood told Bloomberg that the company is using stockpiles to compensate for slower ore extraction and that the protest hasn’t affected output.

BHP is the majority owner of Escondida with 57.5% of the mine. Rio Tinto (RTP-N, RIO-L) has a 30% stake.

In New York on July 26 BHP finished down 27 to US$42.36 on roughly 2.4 million shares traded.

While the threat of a strike was said to be responsible for coppers 4% gain from July 21 to July 25, prices eased on July 26, trading at $3.43 lb. at press time down 5 from yesterday’s close in New York of US$3.53 a lb.

On Monday July 17 management submitted what it said was a final contract offer to union workers. It said it would ask the government to intervene to extend negotiations if a strike vote occurs.

Workers plan to vote on a strike on Friday July 28 if they vote in favor a strike would likely begin on Aug. 7.

The union is looking for a wage and benefits package that better reflect rising copper. The last contract was negotiated at Escondida in 2003. Reports say workers want a raise of 13 percentage points above inflation. Management is offering 1.5 points above inflation.