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BHP Spence Workers Warn of ‘Long’ Strike Over Pay

By Matt Craze and Nathan Gill
Oct. 21 (Bloomberg) -- BHP Billiton Ltd. workers at the Spence copper mine in northern Chile are prepared to go on strike for a “long time” unless the company improves its wage and benefits offer, a union official said.

Spence workers are seeking similar terms to BHP workers at the Escondida copper mine, also in northern Chile, Daniel Ibacache, a spokesman for the union representing the workers, said yesterday in an interview from a tent where striking workers had set up camp outside the mine in the Atacama Desert.

Melbourne-based BHP offered Escondida workers a bonus of 14 million pesos ($25,718) to agree on a new labor contract before a Dec. 5 deadline, more than the 8.5 million pesos offered to Spence employees, Ibacache said. Spence workers are in the ninth day of a strike today, BHP spokesman Ruban Yogarajah said in a telephone interview.

“We are willing to resist for a very long time,” Ibacache said. “BHP has one set of criteria for Escondida and another for Spence.”

Unionized miners at BHP’s 200,000-ton-a-year Spence copper mine were offered pay increases worth 4 percent a year, less than the 5 percent for Escondida, the world’s largest copper mine, Ibacache said. Spence workers are also pressing for similar benefits to their counterparts in education, he said.

Calama March

Spence workers marched through the city of Calama in northern Chile yesterday to demand better pay, after traveling in a motorcade several kilometers long from the mine. The union may also ask the government to arbitrate in the conflict.

“We’re keen to come to a mutually beneficial solution,” Yogarajah said.

He declined to comment if BHP will declare a force majeure on mine shipments. Output continues at a “reduced rate,” Yogarajah said.

BHP’s copper cathode plant is operating at a “minimum” capacity by the mine’s supervisors to avoid damage to machinery, Ibacache said.

BHP produced 172,685 tons of copper at its Spence mine in the 12 months through June 30 and aims to reach full capacity of 200,000 tons in the coming year, the company said in its annual report on Sept. 14.

Copper futures for December delivery climbed 10.4 cents, or 3.5 percent, to $3.036 a pound on the New York Mercantile Exchange’s Comex unit. Earlier, the price touched $3.0495, the highest for a most-active contract since Sept. 29, 2008.

On the London Metal Exchange, copper for three-month delivery surged $174, or 2.7 percent, to $6,590 a metric ton ($2.99 a pound).

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