Chile's Spence copper strike could drag on - union

SANTIAGO, Oct 21 (Reuters) - A nine-day strike hitting Chile's Spence copper mine could drag on longer as employees and owner BHP Billiton (BHP.AX) (BLT.L) had not yet resumed talks on Wednesday, adding to market worries over copper supplies. The strike is hurting output at the mine, which produced close to 165,000 tonnes of copper last year, and is also seen as an indicator of upcoming labor negotiations at other mines in the world's top copper producer, Chile. Workers are prepared for a long strike and have set up camp outside the mine, said Andres Ramirez, who represents the 560-member union at Spence. "We are waiting for the company's call," Ramirez said. "We're prepared for a long strike. We're not closed to negotiations, but it's up to the company now."A BHP Billiton spokesman said on Tuesday that workers have yet to contact the company and demanded the union guarantee the security of negotiators. Workers are staked out near the mine, but have not cut access roads to the facility. Output of copper cathodes at Spence is lower than usual, but BHP would not say by how much. Copper prices retreated from 13-month highs reached on Tuesday as rising inventories underlined a weak demand picture. Three-month copper on the London Metal Exchange MCU3 was trading at $6,365 a tonne on Wednesday. [MET/L] Investors are monitoring upcoming contract talks at mines of Chilean state miner, Codelco, after BHP offered workers at its Escondida mine, the world's biggest, a generous contract that experts say could sets the bar too high for others. Executives at Codelco, the world's biggest copper miner, cautioned workers to be prudent with their demands in contract talks scheduled for later this year. An upswing in the price of metals such as copper has raised the specter of labor unrest in mining powerhouses Peru and Chile, which could add to supply fears and raise the price of minerals. Union workers at Codelco's Andina copper mine told Reuters they will send the company their wage proposal later on Wednesday and start negotiations after they rejected an early contract offer.