Xstrata Montreal Copper Refinery in Labor Talks

TORONTO, May 26 (Reuters) - Xstrata (XTA.L) is negotiating with unionized workers at its Montreal metal refinery, aiming to avoid a strike similar to the one that paralyzed production there three years ago.

The current three-year deal at Xstrata's Canadian Copper Refinery covers about 500 workers and expires May 31.

"We are currently in the process of renegotiating the collective agreement with the union," Xstrata Copper spokesman Louis-Phillipe Gariepy told Reuters.

The refinery produces about 345,000 tonnes of copper cathode and nearly 1 million ounces of gold annually. It receives feed from Xstrata smelters in Canada and Chile, as well as from Vale Inco (VALE5.SA).

Gariepy said it was still "early days" of the negotiations.

The last round of talks in 2007 broke down a week after the contract deadline, resulting in a one-month strike that helped drive copper prices higher.