Tough labor talks could lead to strike at Escondida copper mine - union

(Adds union leader's comments, background details)

By Anthony Esposito and Antonio De la Jara

SANTIAGO, Jan 4 (Reuters) - Workers at BHP Billiton (NYSE: BBL - news) -owned Escondida, the world's biggest copper mine, could go on strike in February if collective contract talks with the company are unsuccessful, union spokesman Carlos Allende told Reuters on Wednesday.

The warning came after the company rejected all the workers' demands, Allende said. He said the proposal the company presented would cut the benefits workers receive in their current contract.

"With (Other OTC: WWTH - news) this attitude the only thing the company is doing is creating an open conflict because the demands were agreed on by the workers," said Allende.

BHP Billiton said in a statement that its proposal "maintained almost all of the benefits of the current contract, adjusting it to the current reality of the company, industry and country."

The company said it hoped to reach a mutual agreement during the talks.

Labor talks at Escondida are seen as a benchmark for the copper industry at large. The last wage talks four years ago, when copper prices were considerably higher, ended with Escondida offering each worker a bonus worth some $49,000, the highest ever offered in Chile (Stuttgart: 704599.SG - news) 's mining industry.

"The company slapped all of the workers in the face ... and if it doesn't change its attitude I imagine that we could very easily go on strike," said Allende.

According to Chilean labor law, the company and workers have a few more weeks to carry out direct talks and if those fail they can then request government mediation.

Escondida is controlled by BHP Billiton with a 57.5 percent stake, while Rio Tinto (Hanover: CRA1.HA - news) owns 30 percent. (Reporting by Anthony Esposito and Antonio de la Jara; Editing by Alistair Bell)