By Antonio De la Jara
(Reuters) - The union at the world's largest copper mine, Escondida in Chile, has called off a strike planned to start on Tuesday after agreeing to extend talks with operator BHP for another day.
The announcement early on Tuesday comes amid fears of a repeat of last year's strike at Escondida, which jolted markets and dampened economic growth in Chile as it dragged on for 44 days.
The extension follows five days of closely-watched talks over pay at the mine that have been mediated by the government of Chilean President Sebastian Pinera.
"We've managed to clear up the points that had stalled the negotiation. But there are still some important points to be resolved," the union said in a short statement, without giving further detail.
Anglo-Australian mining giant BHP (L:BLT) (AX:BHP) also said in a statement that it had agreed to extend talks with the union through Tuesday.
In its last known offer more than two weeks ago, BHP offered a signing bonus of about $18,000, plus separate bonuses intended to buy out clauses in a previous contract that allowed for housing benefits and a loan programme.
The total package was valued at $27,700, including a salary increase of 1.5 percent.
But the union had asked for a signing bonus almost double that offered by the company, and had requested a salary increase of 5 percent, leaving a wide gap between the two sides.
The union said it would have to take any potential deal on Tuesday back to its members for approval.
Escondida produced 925,400 tonnes of copper last year.
On Monday, the union at Chile's Caserones copper mine said it was also postponing a strike over a new labour contract in order to continue government-mediated talks with management through Thursday.