BHP advances toward sale of Chile's Cerro Colorado copper mine-union

(Adds adviser, comments from banking sources)

By Fabian Cambero

SANTIAGO, April 27 (Reuters) - BHP Billiton (NYSE: BBL - news) is advancing with the sale of its small Cerro Colorado copper mine in Chile (Stuttgart: 704599.SG - news) as a number of interested parties have emerged, although a final deal will likely take some months, the mine's union said on Thursday.

BHP management updated union leaders on the planned sale of the mine this week, ahead of planned visits to the deposit by potential buyers, union leader Marcelo Franco said in an interview.

BHP declined to comment.

Cerro Colorado produced 74,000 tonnes of copper last year out of top exporter Chile's total 5.5 million. Located in the extreme north of the country's copper belt, it has government approval to operate until 2023 but that could be extended.

"(The sale) is already pretty well advanced, but they said it could last some months," said Franco, adding that he did not know the identity of the interested parties.

Banking sources have named Chile's Empresas Copec SA , a conglomerate that has voiced interest in diversifying into copper, and Canadian companies such as Lundin Mining Corp, as possible buyers.

Franco said the union has a positive attitude toward a future deal as workers' benefits were legally assured and it felt BHP was more focused on larger Chilean assets Spence and Escondida, the world's biggest copper mine.

Citibank is advising BHP on the sale. (Additional reporting by Clara Denina in London; Writing by Rosalba O'Brien; Editing by Matthew Lewis and Jeffrey Benkoe)