UPDATE 2-Top Chile copper mine hit as workers strike drags

* Collahuasi mine operator says operations restricted

* Subcontractors went on strike, blocked roads on Friday

* Full-time workers’ union says output halted
(Adds color, details on demands, context)

By Alonso Soto

UJINA, Chile, May 8 (BestGrowthStock) – A strike by hundreds of
subcontract workers at Chile’s huge Collahuasi copper mine
dragged on for a second day on Saturday, hurting operations at
one of the world’s largest copper deposits.

Police lobbed tear gas canisters against strikers who have
blocked mine access roads since Friday, resulting in the arrest
16 people, but there were no injuries, police commander Hector
Diaz told Reuters.

The huge open pit mine is located more than 14,440 feet
(4,400 meters) above sea level in the snow-capped Andes
mountains.

Collahuasi said it was operating under restricted
conditions amid protests for higher salaries and better working
conditions. Collahuasi produced 535,000 tonnes of copper last
year, or about 3.3 percent of the world’s mined copper.

A prolonged protest that curbs world output could push up
copper prices that plunged this week on fears of a debt crisis
spreading through Europe. Copper prices recouped some losses on
Friday afternoon as the euro gained against the U.S. dollar and
on supply fears in Collahuasi.

Global miners Xstrata (XTA.L: ) and Anglo American (AAL.L: )
jointly own the mine with a 44 percent stake each. Japanese
consortium Mitsui & Co (8031.T: ) is a minority stakeholder.

Full-time workers’ unions said strikers remain inside the
mine and that the facility’s output has been halted since the
strike and blockade started on Friday. A Reuters reporter at
the entrance of the mine did not see any protests or violence.

Subcontractors are employed by foreign and local companies
that provide services ranging from catering to transportation
and mine excavation. They usually get lesser benefits and
salaries than their full-time peers.

Collahuasi did not say if it was extracting mineral at the
mine. A Collahuasi spokeswoman in the capital Santiago declined
to answer questions about the mine’s output. A Reuters reporter
was not allowed to enter the mine site.

The subcontract workers’ leaders, who said they represent
nearly 4,000 employees, said they could reach an agreement to
lift the strike later on Saturday.

“We are waiting for them (company) to call us and hopefully
we can reach an agreement this afternoon,” Ricardo Arellano,
the leader of the striking subcontractors, told Reuters. “We
are tired of being discriminated against, being treated
differently than staff workers.”

‘WE SUPPORT THEIR FIGHT’

Leaders of the union representing the mine’s 1,600-member
full-time workers said they sympathized with the striking
subcontractors, signaling what could be tough wage negotiations
when the union’s contract expires in November.

“We support their fight,” said Cristian Arancibia, a union
leader trying to mediate between both parties on the site.

A few subcontract drivers remained next to their idle buses
near the mine entrance as police, some in anti-riot gear, stood
nearby outside a police station.

“Staff workers sleep in four-star dormitories, and we have
to lay in crowded containers,” said Miguel Araya, 44,
overlooking the white salt flat next to the mine.

In recent years, simmering tensions between mining
companies and subcontract workers demanding wages and benefits
similar to their full-time peers have led to violent strikes.
Chilean union miners are some of the best-payed miners in Latin
America, enjoying bonuses of up $24,000 in new contracts in
addition to their salaries.

In 2007, subcontractors at state mining giant Codelco, the
world’s top copper producer, slashed output at several
divisions and catapulted copper prices to near annual highs.

If Collahuasi subcontractors succeed in getting better pay
and conditions from the mine, part-time workers elsewhere could
turn to protests to pressure miners to give them more benefits
as copper prices remain near historic highs, said Pedro Marin,
the head of a federation of workers unions at private mines
that include the world’s largest Escondida.

“This could spread like wildfire if subcontractors win this
fight,” Marin, who is also a full-time workers’ union leader at
BHP Billiton’s (BHP.AX: ) (BLT.L: ) Escondida. “Their fight is a
legitimate one.”

Collahuasi employed 4,250 subcontractors at the end of
2008, the company said in a report published last year.

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(Reporting by Alonso Soto; Editing by Eric Walsh and Will
Dunham)

UPDATE 2-Top Chile copper mine hit as workers strike drags