February 10, 2017 / 3:18 PM / a year ago

Strike at BHP's Escondida copper mine in Chile enters second day

ANTOFAGASTA, Chile, Feb 10 (Reuters) - Striking workers at BHP Billiton’s Escondida copper mine in Chile girded for a prolonged stand-off with the company on Friday, as the work stoppage at the world’s largest copper mine entered its second day and copper prices jumped on talk of BHP declaring force majeure.

Workers in the 2,500-member Escondida Union No. 1 downed tools early Thursday after talks with the company failed, beginning a strike that threatens to imminently affect supplies for one of the most widely used industrial metals in the world.

Copper prices on the London Metal Exchange, meanwhile, jumped 4 percent on Friday to a session high of $6,056 per tonne, on force majeure talk. A BHP spokesman said he was unable to immediately confirm that force majeure had been declared on copper shipments from Escondida.

The strikers are building an encampment outside the mine and for the moment the union appears far from reaching an agreement with the company.

“We’re continuing with our installation, with the construction (of the encampment),” said union spokesman Carlos Allendes. “We’re in the organization process and we’re improving conditions.”

Work at the camp, which is located on a windy, barren plateau some 10,170 feet (3,100 meters) above sea level, started on Thursday and the strikers now are putting in semi-permanent installations, such as bathrooms and sleeping quarters.

They say the last offer by the company reduced benefits from the last collective contract four years ago and they say provisions offered by BHP, which would give new workers less benefits than those who have been at the mine for some time, are unacceptable.

BHP, which has said it will not produce copper for the first 15 days of the strike, said its focus during this period is maintaining minimum services, which consist of small teams of workers maintaining equipment and making sure the mine adheres to environmental protocols.

It also will continue with investment projects, it said.

Three workers doing expansion work at the company’s Los Colorados concentrator, one of the investment projects where work has not stopped, were injured in a fire early on Friday, the company said. It is being investigated.

Fears of a strike at Escondida, which produced 1.15 million tonnes of copper in 2015, had already pushed up copper prices in recent weeks amid concerns about a supply disruption. The metal was trading at $6,060 per tonne at 12:07 p.m. local time (1507 GMT), near 1-1/2-year highs.

Escondida is majority-controlled by BHP, with Rio Tinto and Japan’s JECO also holding stakes. (Reporting by Fabian Cambero; Writing by Gram Slattery; Editing by Bill Trott)

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