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Chile expects February growth, copper output hit by miners strike
[SANTIAGO] Chile expects economic activity growth to be hit by around one percentage point in February because of a strike at world no.1 copper mine Escondida, as copper output slides 12 per cent year-on-year, the government said on Thursday.
Escondida's approximately 2,500 unionised workers began a strike on Feb 9 after contract talks with mine owner BHP Billiton failed, boosting global copper prices on expectations of tighter supply.
Escondida produced around 5 per cent of world copper in 2016. This year, it had been forecast to produce around 1.2 million tonnes, Mining Minister Aurora Williams told journalists on Thursday.
"After 25 days (of strike) we can expect lower production already by some 95,000 to 100,000 tonnes, which naturally will go on rising while the strike is prolonged," she said.
The state had calculated that such a drop in production could hit the monthly IMACEC economic activity index - a proxy for gross domestic product - by about 1 percentage point, said Ms Williams.
Chile is the world's biggest copper producer, and sales of the metal make up over half its export earnings.
The IMACEC index for January will be reported next week and economists estimate it at a growth of around 0.9 per cent. The first effect of the strike will be reflected in February's reading, due in April, said Ms Williams.
The strike turned ugly this week, as miners clashed with police, and there has been no clear sign that the union and company are ready to resume talks in the immediate future.