BHP Billiton Requests Government Mediation in Dispute With Chilean Mine Workers

Escondida is expected to produce 1.1 million tonnes of copper in the year ending June 30 according to BHP

Escondida is expected to produce 1.1 million tonnes of copper in the year ending June 30 according to BHP

An employees union spokesman Carlos Allendes was quoted by the news agency as saying: "The company doesn't want to change its position, so we understand that there is nothing left to negotiate".

"Everyone was taken by surprise", the CEO said, referring to Indonesia's halt of copper exports from Grasberg, which mine operator Freeport McMoRan (FCX -1.5%) has warned could force it to cut production and its local workforce.

Ninety-nine percent of workers voted Tuesday to strike, after the collapse of negotiations mediated by the country's labor directorate. Share prices of the miners, however, set off in the opposite direction.

"If the company said it's not going to be producing, then they don't need so many workers", Tapia said.

In a statement, BHP Billiton said that it intends to stop production at the mine due to the strike as it can not guarantee the safety of 80 workers who have been permitted by the government to stay at the mine to undertake critical duties.

The union is vowing the longest strike since 2006, when workers walked out for 25 days.

Chile is the world's largest copper producer, supplying one-third of global output. The last wage talks four years ago, when copper prices were considerably higher, ended with Escondida offering each worker a bonus worth some $49,000, the highest ever offered in Chile's mining industry.

Copper is used primarily in power generation and for the transmission of electricity.

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