UPDATE 1-RUSAL rejects union demands at Guinea alumina plant

* RUSAL rejects union demands, says could hit stability * Workers continue strike but plant not shut down (Adds quotes, background and detail) CONAKRY, April 2 (Reuters) - Russian aluminium firm RUSAL rejected on Thursday as "unacceptable and economically groundless" demands by unions at its Friguia alumina refinery in Guinea, where an employee said a workers' strike was continuing. Workers at the plant, which has the capacity to produce 640,000 tonnes of alumina per year, went on strike in a pay dispute on Wednesday, but maintained a minimum service so the refinery does not shut down completely. "Unconstructive actions of the unions could have negative consequences for the production at Friguia and ruin the social stability in the region," RUSAL said in a statment issued on Thursday. RUSAL said that it was supplying water, electricity and healthcare to the nearby city of Fria and had ensured production levels had been maintained, despite the global financial crisis, which has forced cuts in mining across the world. An employee in the plant, which employs more than 1,000 people to refine bauxite into alumina, an intermediate product which is then smelted to become aluminium, said the strike continued on Thursday. "The factory bell did not even ring today and I am at home," said a company employee, adding that workers were demanding their salaries be increased to a minimum of $300 per month. A mines ministry delegation was involved in talks between the parties, he added. A military junta that seized power in Guinea in December has threatened to review and potentially cancel contracts international mining companies signed with the previous administration. Though rich in gold and iron ore as well as bauxite, Guinea remains deeply impoverished, and in the past Guineans have targeted resources firms in protests against lack of water and electricity.