MELBOURNE -(Dow Jones)- BHP Billiton Ltd. (BHP.AU) said Monday it struck a wage deal with the union negotiators representing striking workers at its Spence copper mine in Chile.

Workers at the mine, who have been on strike since Oct. 13, have yet to vote to approve the deal, which covers a 41-month period, BHP said.

The mining company said the agreement features a 4% salary increase as well as some bonus payments including a housing bonus.

BHP suspended ore extraction at the mine, which last year produced 164,000 metric tons of copper cathode, while the strike has been in place and has said it is losing 500 tons of copper production a day as a result.

The strike at Spence, coupled with other supply disruptions, falling ore grades at older mines, and a lack of new projects coming on stream, has helped make the outlook for copper the tightest among industrial metals.

London Metal Exchange copper prices have more than doubled since the start of the year, largely due to surprisingly strong import demand from China but also on the metal's constrained future supply pipeline.

-By Alex Wilson & Elisabeth Behrmann, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com

(END) Dow Jones Newswires

November 22, 2009 22:55 ET (03:55 GMT)

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