Unionized workers at Chilean copper mine Spence, owned by global diversified miner BHP Billiton Ltd. (BHP), went on strike at the start of the first shift Tuesday.

The mining industry in Chile is closely following this negotiations process as contracts at several other mines will expire later this year and in early 2010.

Over a three-day holiday weekend, the 560-strong union voted against the mining company's latest wage and benefits offer, union members said.

BHP officials couldn't immediately be reached for comment.

The union and mine management last week agreed to extend the five-day government-assisted mediation period in the hopes of reaching an agreement.

Contracts expired Sept. 30. The union sought a 5.5% wage increase, improved benefits and bonuses totaling 15 million Chilean pesos ($27,100).

The open-pit Spence mine, which came on line a few years ago, produced about 165,000 metric tons of copper cathodes last year.

This is Spence's second collective-bargaining process as workers. The first was negotiated in 2006 before the mine went into production.

BHP also owns the Cerro Colorado mine and controls and operates the Escondida copper mine in Chile. Last week, BHP offered the over 2,000 members of the union at the latter mine an early wage and benefits package to avoid a possible strike.

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 higher wages and production bonuses.

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