UPDATE 2-Protest against Sumitomo Bolivia mine worsening
* Local residents blocking mine railway line since Monday
* They want compensation for alleged environmental damage
* Protesters overturn containers full of mineral ore
* Mine says protest will cause "big losses" (Updates with comments from the company)
By Eduardo Garcia and Diego Ore
LA PAZ, April 16 (Reuters) - Bolivian peasants on Friday stepped up their protest against the San Cristobal mine owned by Japan's Sumitomo Corp (8053.T), overturning containers full of mineral ore and saying they would keep blocking a key railway line until their demands are met.
Protesters on Monday began the blockade of the rail line, which allows the huge San Cristobal silver-lead-zinc mine to export ore to foreign markets via neighboring Chile.
"Our demands are fair and must be met. The mine is ransacking our natural resources. We want compensation for the damage and ... we want help with our development," protest leader Mario Mamani told local radio network Erbol.
He said protesters had seized control of 80 loaded containers of ore, overturned several of them, and stormed a small San Cristobal office near the border with Chile.
"Every five hours we'll spill the contents of another container," said Mamani.
In a press statement sent on Friday afternoon, San Cristobal, which is fully-owned by Sumitomo, said the protest about 60 miles (100 km) east of the mine is hurting its "economic and productive activities."
The statement said the spilling of ore from containers will mean "big losses" for the company and that protesters are also blocking a road in the area, which is disrupting transportation of supplies to and from the mine.
Protests by Indian groups against mining companies are fairly common in impoverished Bolivia and in neighboring Peru, a leading producer of silver, zinc and copper.
Throughout the Andean region indigenous groups are demanding greater control over natural resources and a bigger share of their countries' mining and energy revenues. Many oppose foreign investment in extractive industries altogether.
DEMANDING COMMUNITY IMPROVEMENTS
According to local media reports, the San Cristobal protesters were also demanding drinking water and electricity for their communities in the Andean highlands.
Sumitomo officials at the company's offices in La Paz and the central Potosi region contacted by Reuters said they were not authorized to give information about what effect the protest was having on the mine's operations.
A San Cristobal official, who asked not to be named, told Reuters on Wednesday that the open-pit mine had been stocking mineral ore in containers since the blockade started on Monday, but did not say whether the mine was still able to export some ore by road or if any stocks were held in Chilean ports.
San Cristobal, in the mineral-rich Potosi region, is one of the largest mines in landlocked Bolivia. It produces some 1,300 tonnes of zinc-silver ore, and 300 tonnes of lead-silver ore per day.
According to Sumitomo's website, the mine is the world's sixth-largest producer of zinc and the third-largest producer of silver.
San Cristobal started operations in August 2007 and has a mine life of 16 years.
Bolivia exported nearly $1.5 billion of minerals in 2009. The Andean country produces mainly zinc, silver, tin and lead. (Additional reporting by Carlos Quiroga; Editing by Marguerita Choy)