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WRAPUP 1-Chile's Chuqui seen avoiding strike but smelter hit

Published 12/28/2009, 11:20 AM
Updated 12/28/2009, 11:24 AM
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* Workers at Chuquicamata seen voting against strike

* Vote seen averting last Codelco strike threat for a year

* Altonorte smelter strikes, coincides with maintenance

* Supply threats boost copper to 16-mo highs in New York

By Alonso Soto

CHUQUICAMATA MINE, Chile, Dec 28 (Reuters) - Workers at Chile's giant Chuquicamata copper mine were expected to vote against strike action on Monday, heading off the last major stoppage risk at world No.1 producer Codelco for nearly a year.

However, as workers voted on a final wage offer from the state-owned miner, union workers at Chile's Altonorte smelter began an indefinite strike just as owner Xstrata cut output at the facility to minimum levels for nearly a month for maintenance work.

Chile has been buffeted by strikes and stoppage threats this year as workers have used wage negotiations to seek a bigger slice of windfall profits after copper prices rebounded following the ravages of global financial crisis.

The supply interruption at Altonorte, coupled with the threat at the Chuquicamata complex, which alone produces nearly 4 percent of the world's mined copper, helped boost copper prices to 16-month highs in New York and Shanghai on Monday. [ID:nN28165234] For data on global smelter output please see http://bond.views.session.rservices.com/Metals/

A prolonged strike at Altonorte could delay some anode shipments and force mining companies to sell their concentrate to other smelters, though analysts expect any short-term market impact to be minimal. A strike at Chuquicamata would send shockwaves through the copper market and boost prices.

Despite some dissident voices in the rank and file at Chuquicamata, union leaders were confident workers would accept state-owned Codelco's [CODEL.UL] wage offer following a month of tense contract negotiations.

Nearly 6,000 union workers at the mine are voting via a secret ballot on whether to accept the offer or strike. Results are expected at around 8:00 p.m. local time (2300 GMT).

Workers, some in gray-colored uniforms and protective headgear, lined up to vote at Chuquicamata's old mine camp ringed by rocky, desert slopes in the dry Atacama desert in northern Chile.

CHUQUI SEEN AVOIDING STRIKE

"They will vote with their conscience and will accept this offer," Victor Galleguillos, head of one of the three unions negotiating jointly, told Radio Cooperativa.

At a meeting on Sunday to mull the offer, some workers yelled "strike, strike" to demand more benefits while others sat quietly as union leaders explained an offer largely unchanged from a previous one rejected last week. [ID:nN27132980]

Union leaders said the early wage offer was rejected by a minority of workers during a public gathering, but that a vote will likely avoid a stoppage that hurts workers pockets. [ID:nN22132572]

Codelco is one of the Chilean state's main earners, and the government has used billions of dollars in windfall copper savings to battle Chile's first recession in a decade amid the global financial crisis.

Rising copper prices, which have more than doubled this year, have emboldened mine workers across the globe to demand more benefits from mining companies.

A Codelco official told Reuters on Wednesday the company would be able to honor all its contract early next year even if workers at Chuquicamata strike, as bigger-than-expected output in 2009 gave the company a cushion. [ID:nN23160951]

Still, a strike would inflict production losses for Codelco, which is set to break years of dwindling output in 2009 thanks to an aggressive investment plan to upgrade older mines, like Chuquicamata. [ID:nN23247277]

Codelco's next round of major collective wage negotiations is not due until late 2010.

Altonorte's 274 union workers, which represent about 90 percent of the labor force in charge of production, downed tools at the complex, which produced 232,000 tonnes of copper anodes last year, and blocked access roads.

Workers accuse Xstrata of deliberately timing the general maintenance, which is carried out every 2-1/2 years and is due to end on Jan. 20, to undermine their strike.

Victor Rodriguez, an official with of Altonorte's No. 1 union, said workers also blocked access roads to the plant in a bid to pressure the company after workers scrapped the company's last wage offer.

"The company shut the door on us and we are exercising our legal right to vote," Rodriguez said. "All access roads are blocked... we are not letting anybody in." (Editing by Simon Gardner and Marguerita Choy)

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