Strike At Chile's Collahuasi Copper Mine Enters Eighth Day

The labor strike at Chilean copper mine Dona Ines de Collahuasi entered its eighth day Friday with no new talks scheduled for the session, a company spokeswoman said.

Production at the mine, however, remains normal as a result of a contingency plan put in place when the 1,551 unionized workers at the mine downed their tools on Nov. 5, she said.

The spokeswoman said the mine, the copper concentrator plant, the molybdenum plant and the Patache port out of which Collahuasi ships its metals, are all operating normally.

The union, meanwhile, maintains that the mining compound is only operating at 20% capacity.

The spokeswoman added that the mining company--owned by diversified mining companies Xstrata PLC (XTA.LN) and Anglo American PLC (AAUKY, AAL.LN), each with a 44% stake--has been in touch with its clients.

"We've been in communications with our clients to assure them that our contracts will be met," she said.

In a bid to set a precedent in the Chilean mining sector in light of record high copper prices, the union is prepared to drag the strike out to get a bigger share of increased copper earnings. Union leaders say their demands, which include improved benefits and a 10% wage increase, will cost the company $60 million a year, a fraction of what the company will earn as a result of higher copper prices.

Collahuasi 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.

The mine is located in Chile's northernmost First Region. It's 185 kilometers southeast of the port of Iquique, high in the Andes mountains at 4,400 meters above sea level.

While Xstrata and Anglo American hold the majority stakes, a consortium led by Mitsui & Co. (MITSY, 8031.TO) holds the remaining 12%.

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

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