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A strike at Escondida in Chile, the world’s largest copper mine, could end in its fourth week on Thursday when more than 2,000 workers vote on a preliminary agreement reached by their union.

Pedro Marin, union secretary, said the agreement for a new collective contract had been reached at hastily convened talks on Wednesday.

“We will continue talking …but we have reached the basis of an agreement,” he said.

Pedro Correa, corporate manager at Escondida, sounded a more cautious note, however, saying no agreement had yet been reached. He said the union had made a proposal during the first, informal meeting between union leaders and company human resources leaders since talks broke down more than a week ago that was in line with the aspects under discussion.

“The solution to the collective contract negotiations is in the hands of the union leaders. This conversation could be a solution, but we have to be cautious,” he said.

Copper futures in New York fell 1 per cent near the close of business on Wednesday after Escondida and union leaders reached the preliminary deal.

Talks to resolve the strike earlier broke down when Escondida failed to improve on its 4 per cent pay offer after the union reduced its pay claim to 8 per cent.

Copper concentrate production has been reduced to 40-50 per cent of normal levels throughout the industrial action while copper cathode production recently re-started and has reached 20 per cent of normal levels after the company brought in up to 350 replacement workers.

The company says it has been losing $16m-$17m a day through lost sales, but the union claims the loss is closer to $34m (€26.4m, £17.8m) once other costs are factored in.

Chile’s mining companies, particularly Codelco, the state copper company, have been closely watching the strike, fearful that they will have to come up with similar settlements during their forthcoming collective contract negotiations.

The Codelco union has stated that it will take the Escondida contract as the base of its claims for contract negotiations for the Andina and Codelco Norte divisions later this year.

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