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Last Updated: Tuesday, 24 October 2006, 08:27 GMT 09:27 UK
BHP output hit by copper strike
Miners after voting to end a 25-day strike at the Escondida mine in northern Chile
Workers returned to work after a prolonged dispute
Metals giant BHP Billiton has seen copper production in the third quarter of 2006 slide 19% after a month-long strike at its Escondida mine in Chile.

Workers at the world's largest privately-owned copper mine downed tools over pay and holidays.

In a trading update, Anglo-Australian BHP warned of rising costs, equipment shortages and a general struggle to meet global demand.

Aluminium and nickel production both rose 1%, while iron ore gained 5%.

But maintenance and the declining richness of ores saw lead, zinc and uranium output all fall.

Acute problems

Analysts expect BHP Billiton to post a full-year net profit well in excess of last year's $10.45bn (5.58bn).

But shares in BHP Billiton slipped on the company's warning that it was operating in a difficult climate,

"While the majority of BHP Billiton's projects remain broadly on schedule and budget, tight labour markets and shortages of equipment and supplies continue across the industry," the company said.

"These issues are particularly acute in Western Australia and the Gulf of Mexico and continue to impact costs and schedules."

Copper prices have hit record highs this year on soaring global demand led by China.

But the gains were a direct cause of the Escondida strike, as workers argued that they deserved to share in the company's good fortune.

During the strike, the company said the mine lost about $16m a day thanks to a 40% fall in production.

Union members at the Escondida mine have now accepted new contracts, after workers voted by a margin of more than 13 to one to accept a new 40-month contract, with a 5% wage rise and a $17,000 bonus.

Chile copper miners' strike ends
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08 Aug 06 |  Business
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03 Aug 06 |  Business

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