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Copper prices soar amid labor strikes at Chilean mines

Copper prices soared on Tuesday as labor strikes pressured some of the largest copper mines in Chile, which produces one-third of the world's supply of the metal.

A strike at the Collahuasi mine and labor unrest at state-owned Codelco helped send copper to its highest level in two months, hovering around US$8,000 a tonne in London on Monday and Tuesday.

It was the second day of a walkout by workers at Collahuasi, which accounts for about 8 percent of Chile's world-leading, 5.3 million tonnes of copper produced annually, after talks between union and management broke down.

"The strike is on, indefinitely, until we sit down to talk with the company," said Sergio Igoni, a union leader at Collahuasi, which is run by subsidiaries of the Anglo-Swiss company Xstrata and international mining giant AngloAmerican.

Collahuasi's 700 workers are demanding an 8 percent pay hike, health and social benefits, and a US$22,000 bonus as international market prices for copper hit record highs. The company so far has offered a 4 percent pay hike.

"So far, they have not called us" for talks, Igoni said.

On the strike's first day, Monday, workers marched to the port of Iquique, 2,000km north of Santiago, in a protest during which authorities arrested three people, union sources said.

The company, which produces a total of 440,000 tonnes a year, said it was operating under a contingency plan.

"We have a plan which assures that we can keep up our production of pure copper," a company spokesman said, according to Santiago media.

At the government-owned Codelco, the world's top single producer, some 28,000 subcontracted workers walked off the job two weeks ago, demanding better salaries and benefits to put them on a par with Codelco's 14,000 permanent employees at the plant.

The strike began at the end of last month at the company's biggest mine, El Teniente, 90km south of Santiago, where 50 workers were arrested after security forces were called in.

The protesters have since blocked access at some of the company's four other mines, with violence erupting on Monday at El Teniente.

In addition the company on Monday suspended work at its Andina division northeast of Santiago after a worker was stoned by unidentified assailants believed to be supporting the striking subcontractors.

The company admitted that the strikes have forced a cutback in production.

Copper extraction at El Teniente was back to 100 percent of capacity by late Tuesday, while Andina was expected to be fully operational by as early as yesterday, Codelco officials said.
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