Chile Collahuasi Workers, Management Resume Government-mediated Talks

Unionized workers and management at Chile's Dona Ines de Collahuasi copper mine on Tuesday resumed government-mediated talks following a three-day holiday weekend, a company spokeswoman said.

Last 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.

If talks fall through, the unionized workers at Collahuasi, which represent about 90% of the mine's union-eligible workers, could go on strike Friday morning.

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 request it. Union leaders, however, recently said they aren't likely to request another mediation period.

The sole union at Collahuasi seeks a real wage increase of 10%, while the company has offered increases of 2%-3% depending on salary, a union leader recently said. The union also aims to obtain improved production bonuses and benefits, in light of high international copper prices.

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%.

It 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.

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

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