Giant mine workers to end two-week strike in Chile

Workers at Chile's giant Escondida mine accepted a company offer on Friday to end a two-week strike that shut down the world's top copper deposit and stoked fears of a global supply shortage.

Union leader Marcelo Tapia told reporters workers could return to the job as soon as Friday evening to lift a stoppage that is believed to have cost owner BHP Billiton more than 40,000 tonnes of copper.

An end to the strike could ease supply fears and add to a sharp fall in copper prices as a gloomy global economic outlook sparks a flight to save-haven assets.

The world's top miner had defied strikers, resubmitting a lower bonus offer that they snubbed last week but that aimed to set an example to workers at other mines mulling similar pressure tactics to demand more from the copper-price bonanza.

Union officials said the proposed bonus worth $5,760 fell short of workers' expectations but acknowledged that strikers were getting tired after two weeks on the picket lines without pay.

The stoppage lasted longer than expected and forced the mine to declare force majeure – a contract clause that frees it of liability on delivery delays – on copper concentrate sales.

It also became a headache for unpopular President Sebastian Pinera, who is struggling with massive student demonstrations turning violent yesterday.

The Escondida strike caught Chile off guard, coming outside the collective bargaining process. It has raised the specter of increasingly unpredictable and volatile labor action in Chile, the world's top copper producer.

The world's No. 3 copper mine, Collahuasi, was hit with a 24-hour partial strike over the weekend. Some workers at Collahuasi, which accounts for 3.3 percent of global mined copper, downed tools on Saturday over labor demands of their own but ended their protest on Sunday.

Diego Hernandez, CEO of state copper giant Codelco , the world's biggest copper producer, told reporters he saw some risk that unrest at Escondida could spread to other mines in Chile, but said companies would be able to manage. "There is a risk to more industrial actions but not a big one," Hernandez said.

Labor unrest and severe weather disruptions have buffeted the mining industry in Chile this year, which may cut its annual output target and deepen a global supply deficit.