Chile's Supreme Court on Monday ruled that state copper mining giant Codelco does not have to hire thousands of subcontract miners into its full-time ranks and union leaders warned another strike has not been ruled out.

Union leaders began a hunger strike because Codelco still had not acted upon pledges it made last week to convince thousands of subcontract miners to lift a three-week strike against its divisions.

Codelco won't sit down to talk, complained Cristian Cuevas, head of the Confederation of Copper Workers, who is taking part in the hunger strike. Workers are being discriminated against.

The workers ended their strike last week after a government proposal that included the state-owned company keeping agreements it made last year to hire many subcontract workers on a permanent basis.

Complicating matters, the Supreme Court said a state Labor Directorate order last year in favor of the subcontract workers was illegal and arbitrary.

Codelco, the world's No. 1 copper producer, said it endorsed the ruling but would continue to incorporate some of the subcontractors.

Codelco reiterates that it will continue to reorganize its production, which implies, among other things, internalizing some functions which subcontract workers are fulfilling today.

Subcontract miners voted on May 5 to end their 20-day strike that at times had turned violent. The strike cut Codelco's copper output and helped push global prices for the red metal to new life highs.

The subcontractors agreed to a proposal that includes a pledge by Codelco to absorb many of them into its full-time ranks, as well as payment of a 500,000 peso (US$1,067) bonus agreed to in 2007.

The Confederation of Copper Workers said in a statement it was on high alert, and did not rule out renewed strike action.

The three-week strike, which started on April 16, repeatedly disrupted Codelco's Teniente division, home to the world's largest underground copper mine.

Two weeks into the strike, Codelco said it had lost about 19,000 tonnes of production, valued at about $100 million. But it has not given an update on estimated losses from the whole strike. (Reporting by Erik Lopez, Writing by Simon Gardner; Editing by David Gregorio, Phil Berlowitz)

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