UPDATE 6-Collahuasi strike talks tense, but deal seen possible

* Talks advance after setbacks- source

* Workers protest to halt use of strike defectors

* Wage deal to end strike still seen possible

* Union, management seeking end to strike in 27th day
(Adds comments from source familiar to talks, paragraph 2)

By Fabian Cambero

IQUIQUE, Chile, Dec 1 (BestGrowthStock) – Tensions flared between
Chile’s Collahuasi mine and protesting workers on Wednesday,
but wage talks continued in a sign a deal could still be
brokered to end a 27-day strike at the world No.3 copper
deposit.

A source familiar with talks said negotiations had moved
ahead since early afternoon, when union president Manuel Munoz
said there had been no progress in ending the longest-ever
strike at a major private copper mine in the world’s top
producer, Chile.

Police used water cannons to disperse several hundred
demonstrators who tried to block streets and burn debris in a
morning protest in the northern city of Iquique to demand local
authorities force strike defectors back onto the picket line.

The mine operator said acts of violence by some unionized
workers could “seriously harm” talks.

Still, industry experts and analysts say renewed talks show
both sides want to secure a deal to defuse the stoppage, which
began on Nov.5, as soon as this week.

At least 220 full-time workers broke from the strike at
Collahuasi, which extracts 3.3 percent of global mined copper,
or 535,000 tonnes a year. It has hired hundreds of temporary
workers and around 100 new, permanent employees.

Collahuasi has managed to operate with limited production
losses despite the strike, thanks to a contingency plan. The
operator said on Wednesday its output was at normal levels, a
day after saying operations were normalizing satisfactorily. It
did not quantify what “normal” meant.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

TAKE-A-LOOK Collahuasi mine strike [ID:nN27209201]

TIMELINE-Major Chile mine strikes [ID:nN04140477]

ANALYSIS on Chile mines adapting to strikes[ID:nN30273440]

Graphic: http://r.reuters.com/deh22q

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The two sides in recent days have appeared keen on a deal
to end the strike, which is now longer than a nearly four-week
2006 stoppage at Escondida, the world’s top copper mine.

Continuing to operate on a contingency plan, however, could
risk damage to machinery handled by part-timers and harm the
long-term relationship with the union, industry experts say.

The mine, owned by Xstrata (XTA.L: ) and Anglo American
(AAL.L: ), had by last week probably suffered minimal losses of
about 6,000 tonnes, or about 1 percent of annual output,
traders say.

Union leaders have shown signs of fatigue as restless
workers who are going unpaid press for resolution.

The mine failed to bypass the union after most strikers
snubbed a $29,000 bonus offer that would have ended the
deadlock.

Management had needed to convince 50 percent of strikers to
accept the bonus by Friday, but as of last week management had
won over less than 15 percent of the 1,551 unionized workers.

Copper prices (CMCU3: ) have shown little sensitivity to the
strike or resumed talks, partly because the operator has kept
supplies flowing and as other factors such as the euro zone
debt crisis have taken precedence.
(Writing by Brian Ellsworth and Alonso Soto; Editing by Simon
Gardner and Sofina Mirza-Reid)

UPDATE 6-Collahuasi strike talks tense, but deal seen possible