Unionized workers and management at BHP Billiton Ltd.'s (BHP) Spence copper mine in Chile will begin contract negotiations early next week, as current contracts expire on Sept. 30.

Following the legally mandated process, the 500-strong union presented its wage petition, which includes a 5.5% increase, social benefits and bonuses linked to international copper prices.

The company then presented its counter-offer, according to local labor laws, a BHP spokesman said.

Talks will begin on Monday and could run through the end of the month if both sides don't reach an agreement. Before workers can go on strike, once their contracts expire, local laws include a five-day, government-mediated negotiations period if either party calls for it. Finally, there's an additional five-day mediation period if both parties agree to it.

The open-pit Spence mine produced about 165,000 metric tons of copper, in the form of cathodes, last year.

In addition to Spence, in Chile BHP owns the Cerro Colorado mine and controls and operates the Escondida copper mine. The latter will begin wage negotiations later this year.

In 2006 when copper prices were booming, Escondida workers went on strike for nearly a month, bringing the world's largest copper mine to a standstill as they sought bigger wages and production bonuses.

-By Carolina Pica, Dow Jones Newswires; 56-2-820-4244; carolina.pica@dowjones.com