Labor negotiations at Antofagasta's Centinela copper mine in Chile have collapsed, with workers set to launch a strike on Wednesday, heightening labor tensions in the mining sector of the world's largest copper-producing nation.

The Minera Esperanza and Distrito Centinela unions issued a statement saying that mandatory mediation led by Chile's labor inspectorate failed to resolve the dispute, and the strike will begin at 8 a.m. local time. The two unions represent more than 700 workers.

Copper prices are near record highs, and labor conflicts in Chile's copper industry continue to intensify. Managers at Escondida, the world's largest copper mine owned by BHP Group, have also voted in favor of a strike and are currently negotiating with the company under government-mediated talks.

If the strike drags on for an extended period, it will deepen market concerns about copper supply from Chile. Chile's copper output this year has already been battered by accidents, severe weather, and operational problems.

Centinela is one of Antofagasta's four mines in Chile. This marks the mine's first strike, and it produced 240,400 tonnes of copper last year.