Tuesday, August 29, 2006

BHP may replace Chile copper strikers but no decision yet

BHP Billiton (BHP) said Thursday it is looking into hiring additional contractors at its Escondida copper mine in Chile as a strike involving around 2,000 unionized employees enters its eighteenth day.

However, a spokeswoman for the Melbourne-based global miner denied local media reports that Escondida, the world's biggest copper mine, is about to bring in workers from Peru.

"We're looking into the possibility of bringing in temporary personnel, which is our legal right," she told Dow Jones Newswires, adding however no decision had been made.

Existing contractors and non-union workers continue to maintain output at 40%-60% capacity, with customers' cathode requirements still being met but concentrate deliveries remaining under force majeure, the spokeswoman said.

She confirmed mine management is also evaluating negotiating individually with workers on the condition they return to work.

Union leaders were quoted as saying overnight that the company had already started making approaches to individuals but vowed none of its members would break rank.

The BHP Billiton spokeswoman said dialogue between management and the union continues, although the company stands by its fourth and final offer made Sunday of a 4% real wage increase, up from its previous 3% offer.

The offer includes another 1.3% hike in the fourth year if workers sign a four-year deal, as well as contract signing benefits totalling 17 million pesos ($32,000), including an unprecedented CLP9.6 million market conditions bonus; a CLP3.4 million end-of-negotiations bonus; and a CLP4 million interest-free loan.

Government-mediated talks broke down Monday after the union voted 98% in favor of rejecting the offer on the grounds they were looking for a two-year rather than four-year deal. They later trimmed their wage hike demand to 8% from 10% and said bonus demands were negotiable in the hopes of resuming stalled contract talks.

"We're very disappointed that we've been unable to reach an agreement," BHP Billiton Chief Executive Chip Goodyear said in a conference call Wednesday, as the offer was very "attractive."

BHP Billiton controls Escondida with a 57.5% stake, while Rio Tinto PLC (RTP) holds 30%, a Mitsubishi Corp. (8058.TO)-led Japanese consortium 10% and International Finance Corp. 2.5%.