UPDATE 1-CRU/CESCO-S. Copper will only open Cananea on own terms

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By Antonio de la Jara

SANTIAGO, April 2 (Reuters) - Southern Copper (PCU.N)(SPC.LM), one of the world's biggest copper producers, will only reopen its strike-hit Cananea mine on its own terms, Chief Executive Oscar Gonzalez told Reuters on Thursday.

Gonzalez also said in an interview at the CRU/Cesco copper conference in Santiago the company's La Caridad smelter in Mexico was operating at half capacity because of a lack of concentrates from Cananea.

He forecast the company's overall copper output at close to 500,000 tonnes this year, not including the Cananea mine, and sees output rising to 800,000 tonnes in 2012 following the start-up of the Tia Maria project in Peru.

Southern Copper, which operates in Peru and Mexico and is controlled by Grupo México (GMEXICOB.MX), said this week that it would close the mine because of a prolonged labor strike, and said it would fire all workers.

"We are all waiting for the intervention of Mexican authorities and when this happens, we will start to see the conditions of the plants, and what we have to do to restart," he said.

"We won't restart unless its on adequate terms for the company and its shareholders and for the town itself which has suffered for 20 months", he said.

He said production outlooks for this year do not include Cananea, but said there was a slight chance it might start working in the second half of the year.