BHP Billiton reaches tentative agreement with copper miners, easing strike risk

Gold Ten Futures, June 12, according to foreign media reports, BHP Billiton has reached a wage agreement with Chilean unions, indicating that the company will avoid a costly strike at a copper mine that accounts for about 1% of global supply. More than 1,100 members of the main union at BHP's Spence copper mine in northern Chile will vote on the new proposal, BHP Billiton said in a statement earlier on Wednesday. The breakthrough came on the fifth and final day of mediation by labor ministry officials. Both sides agreed to extend the negotiation period to hold a vote. The Spence copper mine produced about 250,000 tons last year, and avoiding the strike will ease tensions in the busy collective bargaining process in Chile's copper industry. While high prices have encouraged workers, companies want to avoid costly strikes without unduly increasing fixed costs in a cyclical and capital-intensive industry. A deal at Spence would also ease concerns about looming labour talks at Escondida, BHP Billiton's other Chilean copper mine, which is more than four times the size of Spence and has been the site of protracted strikes in the past.