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LONDON/SANTIAGO - Global copper miners are struggling to keep pace with demand so industrial action at anything other than the smallest operation could trigger panic buying and give prices another leg-up towards record highs.

A number of key contracts -- the main indicator for potential labour disruptions -- come up for re-negotiation in copper in the remainder of this year and in 2011.

Copper prices at over $8 000 a tonne look to be targeting the all-time peak of $8 940 -- boosting union expectations of getting a greater share of company profits.

Also, in nickel an important contract expires next September in Canada, where disputes removed almost 10 percent of world output for a protracted period.

Potential strikes would be of less concern to other metals, such as aluminium and zinc because of ample supplies.

But any upsets in copper could be critical, especially given the relentless string of other problems it has had to contend with, including falling ore grades and project delays.

"Copper miners are running flat out, the fact that every bit of supply is needed is obvious. Any disruption makes a big difference," said Jim Lennon, analyst at Macquarie Securities.

Lennon estimated disruptions and problems so far this year already meant global copper output had fallen 600 000-700 000 tonnes short of levels planned at the start of 2010.

Shortfalls have helped underpin copper prices and raised union expectations.

"We want these companies to redistribute the wealth," said Cristian Arancibia, head of the Mining Federation, an umbrella group of around 5 000 private mine workers across Chile that include miners in the world's top copper mine Escondida.

"These companies have exorbitantly high profits and all that money is leaving the country in the hands of foreigners."

In late October and November, pay deals come up for negotiation at two big facilities in top producer Chile at Codelco's Radomiro Tomic and the large Collahuasi mine owned mainly by Xstrata and Anglo American. Arancibia is also the treasurer of the Collahuasi mine.

Other union leaders said the San Jose mine accident, which has kept 33 miners trapped under the Chilean desert for nearly two months, has helped boost the image of union workers who were increasingly considered privileged employees with high wages and hefty bonuses, according to previous opinion polls.

NEXT YEAR

Looking ahead to 2011, the progress or otherwise of contract talks at Teck's Highland Valley copper mine in British Columbia, Codelco's El Teniente complex in Chile and Grupo Mexico's Asarco facilities in the United States will be watched keenly.

"With copper prices as high as they are you can bet the union demands (at Asarco) will be pretty stiff," said Charles Bradford, metals analyst at Affiliated Research Group, LLC in New York.

But the firm's U.S. copper output wasn't that important in the overall scheme of things, he added.

The impact of industrial disputes tends to be over-played, according to Neil Buxton, managing director of GFMS Consulting.

"They can't be ignored, but the market does adjust fairly quickly to any such loss of output," he said.

The nickel market coped well with one of the longest labour disputes in Canada's mining history at Vale's Sudbury, Ontario operations.

This and a strike at its Voisey's Bay site in Newfoundland and Labrador, removed about 120 000 tonnes of annual output.

Given the hard line Vale took with workers at these operations many do not anticipate colleagues at its Thompson, Manitoba facilities to go down the same route.

"Vale told Thompson workers as far back as Q4 2009 that whatever is on the table for Sudbury when the strike was on will be heading their way next time around," said another analyst.

"I'd be quite surprised if they even considered a strike. They know what's coming and the smart ones will have found a new job by then if they didn't like it."

A strike might again have little impact. Metal from Sudbury and Voisey's Bay is coming back into the market, even though workers remain on strike at the latter. Several new projects will add some 250 000 tpy to supply in the next year or so, Lennon estimated.

Chinese producers of nickel in pig iron (NPI) -- a lower grade of nickel -- are also in a position to respond if extra supplies are needed and the price is right.

In amply-supplied markets such as aluminium, industrial disputes are likely to be few and far between.

"The aluminium market is a business where the margins have been so thin lately, that I'd be surprised to see big problems with the labour force trying to extract more," said Justin Lennon, base metals research analyst at Mitsui Bussan Commodities (U.S.A.) Inc. in New York.