BHP Billiton and Rio Tinto Group face a strike today at Chile's Escondida, the world's biggest copper mine, after failing to agree on how much to raise wages.

Workers at Escondida, which accounted for 8.5 percent of all mined copper last year, will walk off the job at 8 a.m. New York time, said Pedro Marin, a spokesman for the union that represents 94 percent of employees.

Copper prices in London jumped as much as 2.2 percent today, taking the gain this year to 79 percent. As much as 18 percent of global copper supply may be disrupted by strikes this year due to wage negotiations, UBS AG said in June. ABN Amro Australia Ltd. estimates that BHP Billiton and Rio Tinto get about a fifth of their profit from Escondida.

BHP Billiton and Rio Tinto ``won't want to see it offline for too long,'' said Mark Pervan, an analyst at Daiwa Securities SMBC, in Melbourne. ``This creates more tightness in the market.'' Escondida is 57.5 percent owned by BHP Billiton, the world's biggest mining company, and 30 percent by Rio Tinto, the third-largest.

Shares in Melbourne-based BHP Billiton fell 16 pence, or 1.6 percent, to 1014 pence in London at 8:26 a.m. Shares in London-based Rio Tinto fell 50 pence, or 1.8 percent, to 2756 pence. Shares in Mitsubishi Corp., which owns 10 percent of the mine, fell 2.7 percent to 2,315 yen in Tokyo.

``The strike is on,'' Marin said by phone 10 hours ahead of the planned action at Minera Escondida Ltd.

Strikes in Mexico

Copper producers worldwide have faced similar wages disputes this year. Southern Cross Corp., the fifth-largest copper producer, only regained control of its La Caridad mine in Mexico after striking workers lifted a four-month blockade, it said July 27.

The strike won't initially affect Escondida's copper production because the mine will start processing ore stockpiles, BHP Billiton spokeswoman Emma Meade said by phone. Copper is mainly used to make wires and pipes.

``Output is not affected yet because of stocks and feeding with higher grades, but stripping is delayed and will have an impact in the future,'' Meade said. She wasn't more specific.

The mine, located in Chile's Atacama Desert, was generating $1 million an hour in net operating profit after tax for BHP Billiton in May according to a May 5 note from Peter O'Connor and Jeremy Gray, analysts at Credit Suisse Group. It processes 230,000 metric tons of ore a day, and accounts for 22 percent of Chile's copper output, according to the broker.

Largest Earner

Rio got 18.5 percent of its record first-half profit from Escondida. Overall, its copper business was the largest earner in the half ended June 30, contributing $2 billion in income.

BHP will report its results on August 23. The company's base metals unit, which includes copper, was the second-largest profit contributor.

Workers want wage increases to reflect the surge in prices for copper, Marin said from the Chilean city of Antofagasta. Copper has more than doubled in a year and futures prices hit a record $8,800 a ton on the London Metal Exchange in May.

Escondida's Workers' Union No. 1, which represents 2,052 workers, rejected on Aug. 4 a management offer to increase wages by 3 percentage points above the inflation rate and pay a bonus of 8.5 million pesos ($15,670) per worker. It is seeking a wage increase of 13 points above inflation and a bonus of 16 million pesos per worker.

Chile's annual inflation rate was 3.8 percent in July.

The companies would rather pay workers a higher bonus to reflect the price jump than add to fixed costs such as wages in case copper prices fall, Daiwa's Pervan said.

International Finance Corp. owns the balance of Escondida.