Prolonged Chile strike fans copper supply worries
Tue Oct 20, 2009 11:30am EDT
reuters.com
SANTIAGO, Oct 20 (Reuters) - Workers at Chile's Spence copper mine entered their eighth day of strike on Tuesday, which has hit output and fanned fears of supply disruptions in the world's top producer of the red metal.
Copper rallied to its highest level in over a year on Tuesday due in part to growing optimism of a global economic recovery, a weak U.S. dollar and strike risks. Copper MCU3 on the London metals Exchange was at $6,485 a tonne at 1415 GMT. [ID:nLK378980]
An upswing in the price of metals such as copper has raised the specter of labor unrest in mining powerhouses Peru and Chile, which could add to supply fears and raise the price of minerals.
Higher prices have emboldened mine workers across South America to demand more of the industry's profits.
In Peru, mine workers entered their second day of a nationwide walkout that proved to have limited support, but raised investors' concerns over mining operations in the world's No 3 copper producer.
Chile's Spence union workers leader Andres Ramirez told Reuters workers planned to march later on Tuesday in the northern city of Calama to call owner BHP Billiton (BLT.L) (BHP.AX) "to negotiate with us."
"We don't understand why the company does not want to negotiate with us," Ramirez said.
BHP averted a strike at its Chile's Escondida copper mine, the world's biggest, after workers agreed to an offer that included $25,000 in bonuses and a 5 percent wage hike.
However, experts and mining executives say the generous deal raised the bar for other companies like state miner Codelco and could complicate future contract negotiations at enough operations in Chile to impact global supply.
BHP was not immediately available to comment on the status of Spence negotiations. A company spokesman earlier on Tuesday said production at the mine was lower, but he declined to say by how much.
Last year Spence produced 164,761 tonnes of copper cathodes. (Reporting by Alonso Soto; Editing by Marguerita Choy) |
