UPDATE 1-Grupo Mexico, mine union closer to ending strike

(Recasts with comments from company, union after talks)

By Mica Rosenberg

MEXICO CITY, March 19 (Reuters) - Mexican miner Grupo Mexico and the national miners union moved closer to resolving a long-running strike at the giant Cananea copper pit after the two sides sat down for new talks on Wednesday.

The labor ministry called the union and the company to the negotiating table for the second time in two weeks to end the dispute, which began last July when workers laid down tools at Cananea over health and safety concerns.

Both sides said discussions were moving forward.

"We are seriously trying to resolve this conflict and the most important thing now is that we are both sitting at the table," union official Carlos Pavon said after a two-hour meeting with company lawyers and government mediators.

The miners say thick piles of dust and disconnected ventilators at the mine are a major health hazard, but the company says the problems have been fixed.

Grupo Mexico (GMEXICOB.MX) said it will not pay miners the back wages they want for the seven-month-long strike, but are willing to give workers cash to come back to their jobs.

"We still have some important economic differences but we will continue to work towards an amicable solution," said Salvador Rocha, a lawyer for Grupo Mexico.

Rocha said that in addition to the $2 million to $3 million it is losing a day in lost copper production -- which halved the company's fourth-quarter profits -- the mine has lost $26 million in damaged and stolen equipment.

PERSONAL FIGHT

Grupo Mexico says the talks have been complicated by a dispute with union leader Napoleon Gomez, who is accused by the company and some workers of misusing $55 million paid to the union after Cananea was privatized.

Gomez denies the charges but moved to Canada to avoid potential prosecution in Mexico.

Pavon said the union is waiting for a court ruling to clear Gomez's name early next week.

The strike was declared illegal by a government labor board in January. Grupo Mexico reclaimed control of the mine after a brief clash between strikers and police.

A court later ruled that striking workers could not be fired but said the company could keep refurbishing machinery.