Striking workers force production halt at Chile's Mantoverde mine

SANTIAGO, Jan 22 (Reuters) - Production at Capstone Copper's CS.TO Mantoverde copper and gold mine in northern Chile is largely halted after the mine's desalination plant was shut down amid a nearly three-week labor strike, the company and the mine's largest union said on Thursday.

The union said production been halted, but the company said later that oxide production continued but was likely to stop soon.

A group of striking workers took over the desalination plant that provides water for the mine, the union said, adding that it had not sanctioned the plant's takeover.

Capstone in a statement on Thursday said the takeover had begun on Sunday evening, when individuals entered the desalination plant, 40 km (25 miles) from the mine, and interfered with the plant's electrical system, leading to a disruption of the water supply to Mantoverde.

Striking union members are currently preventing access and restart of operations at the desalination plant, Capstone said, adding it was seeking judicial support to regain access to the plant.

The company noted that on-site water reserves at Mantoverde were being used for essential services.

Sulphide operations were temporarily halted, while oxide operations were expected to continue until tomorrow. At that point they will also be suspended unless the water supply is restored, Capstone said.

The strike began on Friday after Union No. 2, the mine's largest, and Capstone failed to reach a collective bargaining agreement. The union, which represents some 645 members, said on Jan. 7 that it expected a lengthy strike.

Mantoverde is 70% owned by Capstone and 30% by Mitsubishi Materials 5711.T. The mine was forecast to produce between 29,000 and 32,000 metric tons of copper cathodes in 2025.