UPDATE 1-Union strikes at Southern Copper Peru Cuajone mine

(Adds details on Ilo, quotes, size of strike)

By Maria Luisa Palomino

LIMA, June 17 (Reuters) - Workers at Southern Copper's (PCU.N)(SPC.LM) Cuajone mine went on strike to demand better benefits, a union official said on Tuesday, as a week-long blockade over mining taxes deepened in Peru's Moquegua province.

The strike is slated to last for 48 hours, according to union leader Roman More. He said about 280 of 500 union workers have downed tools at the mine in Peru, the world's second-largest copper.

"It's just Cuajone for now," More said, explaining that the strike action does not include the Ilo smelter, also located in Moquegua province.

But Ilo is running low on supplies.

Southern's Chief Executive, Oscar Gonzalez, told Reuters on Monday that Ilo could be paralyzed in the next week if road blocks across Moquegua drag on. Residents demand their province receive a bigger share of taxes paid by company.

The Cuajone mine of Southern Copper, Peru's biggest copper producer, churned out 148,936 tonnes of the red metal last year.

The strike comes as Peru's third-largest copper pit, Cerro Verde (CVE.LM), was in its eighth day of a labor walkout, union leader Leoncio Amudio said.