UPDATE:Chile Collahuasi Mine Still Closed Due To Strike

The Collahuasi copper mine, located in northern Chile, remains closed due to a contract workers' strike, the company said Tuesday.

On Friday, contract workers from several mining service providers went on strike seeking better working conditions and wages.

They blocked the access road to the mining compound, located some 4,500 meters above sea level in the Andes mountains.

"To [maintain] people's safety, Collahuasi has suspended production and is asking the contracting companies to intervene with their workers," the company said in a statement.

The striking workers have blockaded the mining compound, leaving some 4,000 workers, including 1,000 Collahuasi staff workers, stranded inside the complex with limited access to food and water, Collahuasi said.

This strike is considered illegal as the workers aren't in the process of negotiating new contracts. According to Chilean labor laws, workers can strike during the collective-bargaining process.

The local mining industry is concerned the contract worker unrest could spread to other mining companies in light of high international copper prices and the strong earnings mining companies are expected to post this year.

The companies, represented by the National Mining Society, or Sonami, trade group are also worried about the precedent of holding non-striking workers against their will inside the mining compound.

"As legitimate as the [workers'] demands may be, this can't contemplate infringing on the rights of other workers, nor impede their returning to their homes following their workday," said Sonami president Alberto Salas.

The Sonami represents most of the medium-sized and large mining companies in the country as well as several mining suppliers.

Collahuasi produces about 500,000 tons of copper a year, or about 10% of Chile's output.

Diversified mining companies Xstrata PLC (XTA.LN) and Anglo American PLC (AAL.LN, AAUKY) each own a 44% stake in the mine, with the rest held by a consortium led by Mitsui & Co. (MITSY, 8031.TO).

-By Carolina Pica, Dow Jones Newswires; 56-2-715-8919; carolina.pica@dowjones.com

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