RPT-UPDATE 2-Chile Codelco's Chuquicamata miners to vote on contract
* Union leaders will recommend approval of the deal
* Mine produced 443,000 tonnes of copper in 2011
SANTIAGO Dec 14 (Reuters) - Workers at Chilean state copper giant Codelco's massive Chuquicamata mine could approve the company's proposed new labor contract in a vote on Saturday, a union leader said.
"We've reached an initial agreement with the company. We hope this deal is approved to maintain labor tranquility at Chuquicamata," Jaime Graz, spokesman for Union 1 at the mine, told Reuters on Friday.
"We're going to recommend approving the proposal," he added.
Most unionized workers at Codelco's century-old Chuquicamata deposit voted to start early contract negotiations in November.
Thomas Keller, chief executive of Codelco, the world's No. 1 copper producer, told Reuters earlier this month that the company was hopeful it would reach a new labor deal at the mine.
The current contract at Chuquicamata, which produced about 443,000 tonnes of copper in 2011, is set to expire on Feb. 28.
The new, four-year contract would grant workers a 3.7 percent annual wage increase and give them a bonus package of about $42,000, including about $6,330 in cheap credit.
Collective labor talks are closely watched by the mining industry after an uptick in labor action hit Chile's copper output in 2011. During the last contract negotiations in 2009-2010, Chuquicamata's union staged a two-day strike.
Chuquicamata is symptomatic of Chile's aging mines. The deposit's production has been cut in half since 2007 by sharply dwindling ore grades, while costs have doubled.
The mine's transformation into an underground operation will trigger layoffs, but the union said health benefits were the key issue in negotiations.
In late November, unionized workers at the world's biggest copper mine, Chile's Escondida, voted in favor of early labor talks with the mine's controller, global miner BHP Billiton .
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