Jul 25, 2011 (Dow Jones Commodities News via Comtex) -- --Strike at Escondida entered day five Monday

--Local labor office ruled company in "non-regulated talks"

--Union sought government-assisted mediation to end conflict

(Updates with comments from the president of the union regarding government mediation in paragraphs five, nine and 10.)

SANTIAGO (Dow Jones)--A regional labor office deemed the now five-day-old strike at Chilean copper mine Escondida as legal, a union leader at the world's largest copper mine said Monday.

The sole union at the mine went on strike late Thursday to protest what it calls unmet contract terms.

Union spokesman Marcelo Tapia told Dow Jones Newswires the Labor Office had approved a "nonregulated collective bargaining" process, which gives the strike legal ground to stand on.

Escondida, however, can still fire striking workers. Tapia vowed the strike will go on indefinitely if "just one single worker is fired."

The president of the union, Jose Tapia, said the group asked the labor office to act a mediators in the conflict. He added the union is waiting for a response from the mining company regarding the government's mediation.

The union, which represents 96% of the union-eligible labor force at the mine, contends that it is still in the process of bargaining the contract that went into effect in 2009 as the company hasn't met some of the terms in that contract.

Tapia said the 2,375-strong union has a list of demands that includes unmet housing benefits, the end of shifts lasting more than 12 hours, production bonuses and protection for sick workers.

Escondida, meanwhile, offered workers a per-person gross bonus of 2.8 million pesos ($6,060) to end the strike.

"It's not about the money. Our priorities are our labor and contract conditions," Tapia said. But the union seeks, in addition to the unmet benefits, a production bonus of CLP5 million.

This bonus would cost the company a total $25 million to pay out to its workers, Tapia said, noting that it's a small fraction of BHP's earnings from the fiscal year that just ended.

Officials at mine operator BHP Billiton Ltd. (BHP, BHP.AU) haven't responded to several requests for comment.

The union claims Escondida is losing about $30 million a day as it has halted production of roughly 3,000 metric tons of copper a day.

BHP Billiton holds a controlling 57.5% stake in Escondida, while Rio Tinto PLC (RIO, RIO.LN) holds 30%. The remaining 12.5% is held by a Japanese consortium led by Mitsubishi Corp. (MSBHY, 8058.TO).

Over the weekend, the Federation of Copper Workers umbrella union, or FTC, which represents most of the 16,000 staff workers at state copper giant Corporacion Nacional del Cobre, said it was backing Escondida's walkout.

"The FTC declared it's in a state of alert and that it's supporting our labor movement," Tapia said.

The FTC recently staged a one-day companywide strike at Codelco, as the state miner is known, to protest restructuring and what it called the first steps toward privatization.