This rise has put unions in a comfortable negotiating position, meaning the Chilean and Canadian examples will not be the only instances of unions taking advantage of the bullish commodities outlook this year.

The clock is ticking on management negotiations with unions at two major mining operations in Canada and Chile. Xstrata's Sudbury-area mines in Canada, which primarily produce nickel, face a strike if a deal cannot be reached by Jan. 31. Codelco's copper-producing Chuquicamata mine in northern Chile also faces a strike, though it has a few weeks left for negotiations.

Although the global commodities market has already seen a few strikes in 2007, strikes at these large mines would prove particularly disruptive in an already-tight market.

A union at Chuquicamata, Codelco's largest mine, rejected the company's initial salary offer Jan. 29, saying it did not reflect the doubling of metals prices that has occurred since the union negotiated its last contract in 2004. The company initially offered a 2.85 percent raise above inflation, while the union wants a 3.8 percent wage increase above inflation with a $16,912 bonus per person. The two sides have until Feb. 28 to come to an agreement before the current contract expires. The company gave similar raises to two other unions at the mine in December 2006, possibly because Codelco could not afford to lose their output.

Meanwhile, talks over wages and vacation for employees at Xstrata's Sudbury nickel unit resumed ahead of a Jan. 31 deadline, after which workers have threatened to strike. The miners, who belong to the Canadian Auto Workers union, have gone on strike twice since 2000. They shut down production for seven months in 2000 and 2001 and for three weeks in 2004, suggesting the union will not hesitate to strike again if Xstrata does not satisfy enough of its demands.

Both companies are playing for high stakes. Codelco is the world's largest copper producer, so a halt in production at the company's largest mine would be no small deal for the company or its customers. Copper prices rose 41 percent in 2006 over fears of shortages (although prices have fallen somewhat so far in 2007 given increased supplies), meaning Codelco would miss lucrative sales while its customers lost a key source of supplies in a tight market.

And a strike at Xstrata's Sudbury-area mines, which account for 4 percent (63,000 tons) of annual world nickel supplies, would exacerbate the global shortage of the metal. (The mine also produces substantial amounts of copper.) The supply-demand squeeze has made nickel prices far more sensitive to events ordinarily of little consequence. Nickel rose $900 to a closing price of $38,200 per ton Jan. 23 upon news the previous day of the wreck of a ship carrying 1,000 tons of nickel. That cargo amounts to 20 percent of the 5,052 tons of nickel currently stored in warehouses worldwide, which itself comprises less than two days' supply of global consumption. Nickel prices have since hit a record high of $40,000 per ton.

This tight commodities market means union workers at mining companies are almost guaranteed greater influence with their employers.

Union power remains somewhat limited, however, since the future of commodity prices remains uncertain. Although copper, nickel and other commodity prices have risen substantially over the past year, commodity prices crashed at the beginning of 2007. Even though prices now remain relatively high, they are not guaranteed to stay that way. It is easier for companies to stick to a conservative wage hike or a healthy bonus to reflect the year's lucrative prices than to guarantee overall higher wages. Xstrata attempted this in the latest negotiations, but the $6,770 bonus per person was rejected by the union to push for a heftier permanent wage increase. A company can raise or lower its annual bonuses relatively easily -- but it is not so easy to reduce wages specified by contract.

Though a strike will harm both workers and management, customers will also feel the pain in the form of reduced supplies. The limited supply of these commodities means that customers will not always be able to find another source should one of the mines temporarily go out of commission, and that they certainly will pay more if they do.

China, for one, would almost certainly feel the heat. China's demand for nickel for use in stainless steel is one of the primary reasons for that metal's sharp price hike. China also accounts for almost 20 percent of the world's copper consumption. The state-owned metals trading company China Minmetals Corp. announced earlier in January that it had almost completed a 15-year supply contract with Codelco, a deal intended to help stabilize the country's copper supplies. Any major strike in the copper industry -- and particularly at a Codelco mine -- would very directly affect the giant Chinese copper consumer.

With high prices to encourage companies to produce commodities and low supplies putting a strain on consumers, it looks like union workers could have the least to lose -- and thus could have the best negotiating position this year.