Chile Collahuasi Workers, Management To Begin Government Mediation

Unionized workers and management at Chile's Dona Ines de Collahuasi copper mine will begin government-mediated talks later Friday, a union leader said.

Earlier this week, the 1,551-strong union rejected the company's most recent contract offer, leading both sides to seek a five-day government-mediated period.

Should talks fall through, the unionized workers at Collahuasi, which represent about 90% of the mine's union-eligible workers, could go on strike on the morning of Nov. 5, Juan Barraza, union secretary, told Dow Jones Newswires.

Strikes in Chile, especially in the mining sector, tend to be short-lived, but nonetheless boost copper prices on world markets.

Local labor laws allow for a second five-day mediation period if both sides jointly request it.

Barraza said the union wouldn't likely request that period, opting instead to strike if the company doesn't listen to its demands.

The sole union at Collahuasi seeks a real wage increase of 10%, while the company has offered increases of 2% to 3% depending on the salary, Barraza said.

The union leader says the company isn't open to negotiating, a claim a spokeswoman for Collahuasi refutes.

"We trust that through the mediation, the union and the company can reach an agreement on contracts, an agreement that will be satisfactory to both sides," she said.

The mine, one of the biggest in Chile, is owned by diversified mining companies Xstrata PLC (XTA.LN) and Anglo American PLC (AAUKY, AAL.LN), each with a 44% stake. A consortium led by Mitsui & Co. (MITSY, 8031.TO) holds the remaining 12%.

The mine produces about 500,000 metric tons of copper a year, or about 10% of Chile's annual output. Chile is the world's leading copper producer, accounting for about 35% of global output.

If workers go on strike, it will be the second industrial action for Collahuasi this year. Earlier in 2010, contract workers at the mine blockaded the access road to the mining compound, forcing the mine to shut down for several days.

-By Carolina Pica, Dow Jones Newswires; 56-2-715-8919; carolina.pica@dowjones.com

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