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UPDATE 2-Deal to End Chile Collahuasi Strike Seen Near
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IQUIQUE, Chile, Dec 2 (Reuters) - Chile's giant Collahuasi mine and its worker union  on Thursday appeared close to ending amonth-long strike the longest ever at a major private Chilean copper deposit, which ha stoked global supply fears.

Both sides seemed closer to a wage deal at the world's No. 3 copper mine despite tensions sparked by a worker protest on Wednesday, the thir full day of negotiations, two sources close to the talks told Reuters.

"There's light at the end of the tunnel," said one of the sources, adding a deal could be reached as soon as Thursday, the 28th day of thestrike.

The sources asked not to be identified because they are not allowed tospeak publicly about the talks.

Workers, camping at an abandoned school in the northern city o Iquique, applauded an update from their union leaders late on Wednesday. Details of what they were presented were not available.

Both labor and management have appeared keen on a deal to end th strike, which is longer than a nearly four-week 2006 stoppage at Escondida, the world's top copper mine.

A deal will likely need to be ratified in a workers vote.

The advances came after tensions flared at the negotiating table following a brief clash on Wednesday between police and workers demanding local authorities force strike defectors back onto the picket line.

Collahuasi has operated with limited production losses thanks to a contingency plan that kept key operations running. Mine spokeswoma Bernardita Fernandez said on Thursday operations were normalizin satisfactorily, but did not gave details on how they compared to pre-strike levels.

For weeks, Collahuasi has said operations were normal according to a contingency plan, and has delivered copper to buyers in Asia and Europe.

At least 220 full-time workers broke from the strike at Collahuasi, which extracts 3.3 percent of global mined copper, or 535,000 tonnes a year. The mine has also hired hundreds of temporary workers and around 100 new, permanent employees.

The mine, owned by Xstrata (XTA.L) and Anglo American (AAL.L), had by last week probably suffered minimal losses of about 6,000 tonnes, or abou 1 percent of annual output, traders say.

Copper prices CMCU3 rose with news of a possible strike, but since have shown little sensitivity to the walkout, partly because the operator has kept supplies flowing and other factors such as the euro zone debt crisis have taken precedence.

Still, a deal at Collahuasi clears the decks for now after a series of other labor deals were inked in November.

The next major collective bargaining talks in Chile are not scheduled until June, when state-run copper producer Codelco negotiates a new contract with workers at the 400,000 tonne-per-year El Teniente mine.



















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