Codelco Copper Strike Ends as Miners Back Record $24,000 Bonus

Jan. 6 (Bloomberg) -- Striking workers at Chilean copper producer Codelco voted in favor of a new pay offer, including a $24,000 bonus, ending a stoppage at the Chuquicamata mine.

Workers will restart production at the world’s second- biggest copper mine at the first shift starting 5 a.m. (3 a.m. New York time) today, union official Miguel Lopez said in an interview late yesterday. The copper mine is the world´s second largest after Escondida, which is also located in Chile.

Copper, which surged to a 16-month high on the threat of reduced supplies from Chile, fell in London for the first session in seven yesterday as concerns about the strike eased. The stoppage at Chuquicamata was Codelco’s first in 13 years.

Early votes and more than 1,700 worker abstentions that are counted as supporting the deal total more than the quorum of 2,700 needed for acceptance, according to Lopez.

“The workers at least managed to get a bit more,” he said. “Now they are feeling quite relaxed.”

The state-owned company offered to increase wages by 4 percent and boost a proposed bonus payment to 12.1 million pesos ($24,000), from 11.5 million pesos previously, according to a company statement. BHP Billiton Ltd., the world’s largest miner, is paying its workers at Escondida a 14 million-peso bonus.

Workers at Chuquicamata are paid, on average, more than 2 million pesos a month, or about four times the national average of 500,000 pesos, according to Gustavo Lagos, a professor at Chile’s Catholic University. They also receive health and education benefits above those of many Chileans, he said.

Atacama Desert

Chuquicamata, located in northern Chile’s copper-rich Atacama desert, employs about 5,000 miners. It´s part of Codelco’s Norte division, accounting for about half the company’s total output of 1.55 million tons. Codelco, based in Santiago, supplies about a 10th of the world’s mined copper.

Copper futures for March delivery gained 0.75 cent, or 0.2 percent, to $3.4135 a pound on the Comex division of the New York Mercantile Exchange. The metal touched $3.429 on Jan. 4, the highest since August 2008. Earlier, prices dropped as much as 0.7 percent on the concern about Chile.

Xstrata Plc, the fourth-largest copper producer, also reached a wage agreement at its Altonorte copper smelter in Chile, according to a union official.

Chilean copper workers have been holding out for better pay after prices more than doubled last year.

--With assistance from Steven Bodzin in Caracas. Editors: Dale Crofts, Andrew Hobbs

To contact the reporters on this story: James Attwood in Santiago at +56-2-487-4019 or jattwood3@bloomberg.net; Matt Craze in Santiago at +56-2-487-4018 or mcraze@bloomberg.net.

To contact the editor responsible for this story: Dale Crofts in Buenos Aires at +54-11-4321-7735 or dcrofts@bloomberg.net