UPDATE 2-Codelco Can Meet Deliveries If Chuqui Strikes-Source

SANTIAGO, Dec 23 (Reuters) - Top world copper producer Chile's Codelco has enough metal to meet deliveries if workers
at its Chuquicamata mine, which produces nearly 4 percent of global supply, strike over pay, a company source said on
Wednesday.

The state miner will on Thursday deliver a final wage offer, which will be very similar to its previous proposal, which workers rejected on Tuesday. That stoked global supply fears and helped boost international copper prices.

Codelco will not negotiate any further, the source said. A strike at the Chuquicamata complex, which is expected to produce 565,000 tonnes of copper this year, equivalent to 3.6 percent of world copper output in 2008, would hit supplies and further push prices that have more than doubled this year.

The vote on the final offer is expected next week and a stoppage could begin as soon as early January, union leaders
have said. Codelco produced 1.54 million tonnes of copper in 2008.

The specter of a strike in the world's top copper producer helped copper prices climb nearly 2 percent on Wednesday. Copper for three-month delivery MCU3 in London ended at $7,000 a tonne, up 1.7 percent from Tuesday's close of $6,881.

The Codelco source, who asked not to be named because he was not allowed to speak publicly, said the state giant would
produce more copper than originally expected in 2009, giving it a buffer of copper stocks if workers were to strike.

"Luckily we had a very productive year that will allow us to meet all our commitments," the source said. "Codelco will have no difficulties to meet, or even increase its copper deliveries during the first months of next year, with or without a strike."

"There is nothing to negotiate. We had reached an agreement with union leaders that was blocked by a minority group," he
added. A union official at one of the three unions that represent about 6,000 workers at Chuquicamata were not immediately
available for comments.

The renewed strike threats come two weeks after union workers blocked access to the mine complex for a day over disagreements on wage talks, halting output and helping support global copper prices. 

Codelco, which holds some of the world's biggest copper reserves, is a key source of revenue for Chile's government, which has poured billions of dollars of copper savings into the economy to claw out of its first recession in a decade.

CODELCO CHALLENGES

Codelco is investing heavily to increase output at most of its mining divisions in coming years, including an estimated $2 billion expansion project at Chuquicamata. Critics say tense talks at Chuquicamata mirror the company's challenges to cut expensive benefits given to powerful unions and improve efficiency. Chile's presidential front-runner, conservative billionaire Sebastian Pinera, has vowed to sell part of Codelco to improve its corporate governance and better compete with slimmer private miners. He is seen wining a Jan. 17 run-off vote against Eduardo Frei, a former president running for the ruling coalition.

Codelco's early offer at Chuquicamata included bonuses worth around $22,700 per worker and a soft loan worth around $5,900, the union and company said. The company offered workers a 3.8 percent salary hike. Early offers are usually sweetened with cash bonuses to convince workers to ink the deal and avert a strike. A group of workers rejected the offer, claiming it was lower than the $25,000 in bonuses and benefits that BHP Billiton gave to its workers at Chile's Escondida copper mine, the world's biggest.

Codelco inked a new collective deal with hundreds of union workers at its Andina mine in November.