Chile copper mine struggles after strike violence

Output at Chile's El Tenientemine, the world's No. 5 copper deposit, remained well belowcapacity on Sunday as staffing was limited by renewed violencefrom striking contractors, mine owner Codelco said. The state miner had expected to return to full productionthis weekend, but protester violence on Friday led the companyto hold many workers back from the 404,000 tonnes-a-year mine. Some full-time staff were returning to work in extendedshifts, minimizing bus trips that had been a flash point forprotests, union leaders said. "With the contingency plan, miners are sleeping up at thecamp for three or four days at a time. We're still far fromnormal staffing," said Juan Meneses, president of El Teniente'slargest staff union. Codelco's [CODEL.UL] struggle to recover output may keeppressure on global copper prices, stoking fears of a prolongedsupply disruption in Chile, the world's top copper producer.

The company did not provide an updated output figure onSunday, but two staff union sources said the mine was producingless than half of capacity. Thousands of contractors went on strike on May 25 to demandCodelco and their employers increase wages and benefits asglobal copper prices hover near record levels. Contractors met with their employers late Friday to lay outtheir demands, but have not heard back, protest leaders said. "We expect to hear from them Monday morning, and in themeantime our strike is holding firm," said Marco Alarcon, aprotest leader. Codelco Chairman Gerardo Jofre said on Friday that the mineoutput dropped back to 40 percent of capacity after violenceflared up and El Teniente could miss its output target for2011. Still, he said there were no plans to break offcontracted shipments with a declaration of force majeure. Chief Executive Diego Hernandez said on Thursday that thecompany had lost about 7,000 tonnes of copper.