UPDATE 5-Chile to reopen copper mine, proposes strike deal

(Recasts with Codelco to reopen Teniente)

By Manuel Farias and Simon Gardner

SANTIAGO, May 2 (Reuters) - Chile's Codelco said on Friday it will reopen the world's largest underground copper mine on Saturday, after the government made a proposal aimed at ending a 17-day sometimes violent strike by subcontract workers.

State-owned Codelco, the world's leading copper producer, closed its Teniente division this week after strike violence flared and some staff were injured. It was the latest in a series of disruptions at the mine.

It first closed two smaller divisions, Salvador and Andina, 17 days ago during the latest in a series of strikes by subcontracted miners demanding a bigger share of windfall profits and improved working conditions.

"Teniente's transport services and productive operations will resume ... on Saturday," Codelco said in a statement.

There are growing signs the strike could soon end.

Arturo Martinez, head of the CUT, Chile's largest umbrella worker union, said on Friday afternoon the government had made a proposal to end the strike, but he gave no details.

"I have received ... a proposition from the government, which I am taking to give to the leaders of Codelco's subcontractors," negotiator Martinez told reporters after visiting the presidential palace in Santiago.