World's biggest copper producer crippled by strike

SANTIAGO: Chilean state-run mining group Codelco, the biggest copper producer in the world, was struggling on Tuesday with a strike that has halved its output and is costing it 10 million dollars a day.

The company said three operations in Chile, the Salvador, Andina and El Teniente mines, were off-line because of the stoppage.

The strike, by contract workers demanding that an agreement for better pay and conditions be respected, has sent copper prices soaring on international markets.

On the London Metals Exchange, copper was trading for 8,655 dollars per tonne, three percent above the average for the month and more than 20 percent over the 2007 average.

On New York's Nymex, the metal moved nearly four dollars higher per pound over the day. The dollar's new record low against the euro Tuesday also contributed.

Codelco chief executive Jose Pablo Arellano said the stoppage was hurting the company. "The loss is a big sum. The fact that we are not producing when prices are as high as this is costing us 10 million dollars (a day)," Arellano told Chilean radio.

"I have called for a stop to these sorts of actions that cause damage, cause losses and some losses that will be irreversible," he said.

The Salvador and Andina mines account for a quarter of Codelco's production, while El Teniente, north of Santiago and the biggest underground mine in the world, accounts for another quarter.

The company last year produced 1.58 million tonnes of copper, 11 percent of total world copper output.

The contract workers launched their campaign five weeks ago, but the strike really started to bite early last week. Last year, an extended stoppage forced concessions from the company.