Codelco sees quick end to crippling mine protest

By Chris Kelly and Alonso Soto

NEW YORK/SANTIAGO (Reuters) – A two-week protest by contractors that has more than halved output at the world’s fifth largest copper mine, El Teniente in Chile, could be resolved as soon as this week, mine owner Codelco said Tuesday.

Strikers and employers are making progress in negotiations to end the wage conflict that has cost the world’s top copper producer three days of production or about 3,500 to 4,000 tonnes, Codelco CEO Diego Hernandez told Reuters in New York.

“The contractors’ trade union is negotiating with its own employer. There has been some progress there and we could solve this problem by the end of this week,” Hernandez said on the sidelines of Metal Bulletin’s Global Markets Forum.

Mine output has tumbled 60 percent since violent protests by temporary workers over the weekend kept most staff workers away from the world’s largest underground copper operation.

Codelco said at least 400 contractors who quit the walkout on Tuesday joined an emergency crew of a few hundred workers at the mine. While the dissidents represent less than 4 percent of strikers, they may signal division in protesters’ ranks.

Protest leaders said on Tuesday wage negotiations were stalled and threatened to block roads leading to the mine to halt operations.

“We are starting a decisive phase in our protest,” protest leader Luis Nunez said. “We will not let companies force workers to go back to work with threats of dismissal.”

Negotiations between contractors and their employers stalled last week after protest leaders rejected an offer for bonuses and benefits worth about $1,500 per worker.

Contractors are asking for $4,700 in bonuses, still a fraction of of the $32,000 in bonuses and soft loans their staff colleagues got to ink a collective deal in April.

German Gonzalez, a representative of contract companies at El Teniente, said employers were willing to renew talks, but strikers’ demand were too high.

The protest by thousands of temporary workers has raised fears of demonstrations spreading to other mines in Chile, the world’s top copper producer. Industry and union sources said contractors at other mines at watching the strike closely, but there was no evidence of growing tension.

Violent protests by contractors at El Teniente in 2007-2008 spread to two other divisions and forced Codelco to halt operations there. Codelco ultimately gave in to their demands.

El Teniente employs around 11,000 contractors, most of whom support non-production operations like reinforcing tunnel walls, repairing machinery and distributing food. The mine’s 4,000 staff workers are directly linked to output operations. (Reporting by Chris Kelly and Alonso Soto; Writing by Alonso Soto; Editing by John Picinich and David Gregorio)