Chile is a major producer of copper, which is a vital commodity for the world's leading economies.

That is why headlines about a strike at the world's largest mine in the Atacama desert, the driest part of the world with zero precipitation, is sending many in the market into a tizzy.

BHP-Billiton (BHP) - Get Report is the leading company operating the Escondida mine, which is shut down, with the exception of maintenance workers. The mine produces some 5% of the global supply of copper.

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The Escondida mine is just one of a series of mines in Chile that have worker contracts up for negotiation. Combined, they represent an even greater share, bringing the total global supply to 12%.

Traders are pushing futures market prices higher by a few percentage points, but some are arguing for even higher prices. That could spell a big investment opportunity.

All this comes after a protracted bearish market for the commercial metal, given the softness in the global economy and lackluster overall demand for commodities.

The Escondida mine represents more than 19% of Chile's production of copper, a vital revenue source for the economy and government that are still reeling from the softness in the market. And some are citing the last time the mine had a strike that lasted for more than a few weeks.

But there is more.

First, miners at a government-owned copper mine already settled a new contract setting a reasonable benchmark for the other mines.

Second, too often the financial media forget how businesses and the markets work in the real world. But that is when contrarians can pounce for market-beating profits.

The potential strikes aren't a complete surprise. And producers including Barrick GoldFreeport McMoRan and Rio Tinto all have mechanisms via their hedging and trading operations to limit their own revenue volatility.

And the consumers from electronics and industrial companies including construction and infrastructure have lined up longer-term contracts for copper.

The blip in copper prices are part of a broader recovery.

First, copper supplies coming out of the mines in general have been subdued, given the soft prices. And with demand copper expected to be revised higher by China, the largest importer of the metal, there is a growing bullish case to be made.

Chinese spending on infrastructure and transportation is adding to copper demand. This includes the flurry of regional projects in Africa and elsewhere in Asia sponsored by the Chinese government.

And there is a seasonal demand for copper used by electronic equipment companies that tends to increase as the market heads into the second quarter in China. The strike chatter might provide a reason to stockpile more copper.

Second, copper in general makes for an interesting hedge for investors seeking to control the risk of inflation and rising interest rates.

Copper is much more useful as a productive commodity than gold, and rising inflation and rates in this economy would suggest a rise in economic production. That production would bolster demand generally for copper.

Add in the bullish market sentiment for some sort of U.S. infrastructure spending plan by the government, and the market for copper gets a bit more compelling.

The bottom line: Don't get spooked about the speculation about more Chilean copper mines strikes. But do look at the fundamental case pointing to improving demands by industry and copper as an inflation hedge.

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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.