BHP Billiton Ltd has closed operations at the world's biggest copper mine and called-off talks with striking workers, sending copper prices soaring.

The world's largest diversified miner said it will abandon the talks in favour of legal action against the workers, who are seeking a larger share of the benefits of spiralling copper prices.

BHP Billiton is due to break its Australian corporate earnings record and post an annual net profit of $US10 billion ($A13.16 billion) when it reports on Wednesday, helped in part by a record annual copper production.

BHP Billiton says workers have blocked all access roads to the Escondida mine, located in Chile's Atacama Desert.

"This heightened union activity means we no longer feel that we are able to unequivocally guarantee the health and safety of our people or the integrity of the operations, infrastructure," said spokeswoman Emma Meade.

"As a result, Minera Escondida has closed its operations and ceased negotiations with the union."

BHP Billiton said it will not negotiate with the union while it is carrying out "illegal activity".

"We will be taking legal action against the union to resolve this," Ms Meade said.

"We will only reopen the operations and restart negotiations when we are comfortable that we can guarantee the health and safety of our people and the integrity of the operations."

The news sent copper prices up by $US160 a tonne.

London Metal Exchange three-month copper futures rose to US7,450 in after hours trading, from to $US7,290 at London close on Thursday.

BHP Billiton said earlier this month that the strike action over pay at Escondida, the largest copper mine in the world, had slashed operating capacity to 40 per cent.

Suspension of cathode production also led to the mining giant declaring a force majeure on its copper concentrate contracts.

A force majeure is a contract clause that would free it from its contractual obligations due to an extraordinary event beyond its control.

Of the mine's 2,930 permanent staff, 2,052 are union members.

Earlier this month workers rejected an offer of three-year contracts including a three per cent rise in pay and bonuses.

It was an improvement over an earlier offer for a 1.5 per cent raise, along with a bonus and low-interest loans, but fell substantially short of a 13 per cent raise and $US30,000 ($A39,408.87) net bonus per worker the union was seeking.

BHP Billiton is the operator of the Escondida mine with a 57.5 per cent stake, while Rio Tinto also holds a 30 per cent share.