UPDATE 1-Peru villagers to suspend copper mine blockade for 2 days-community advisor

The indigenous community of Fuerabamba in southern Peru voted on Tuesday to suspend its 2-month road blockade of Chinese miner MMG Ltd's Las Bambas copper mine for two days until the government visits the region on Thursday, an advisor to the community told Reuters.

Fuerabamba villagers held an assembly on Tuesday to decide whether to accept a deal signed by their leader Gregorio Rojas and MMG over the weekend that would have ended the blockade in exchange for compensation from the company. But villagers decided only to suspend the blockade until Thursday, when they expect Prime Minister Salvador del Solar to visit the region to take part in talks, said Jorge Paredes, an advisor to Fuerabamba.

The decision marks a fresh setback for MMG and its flagship mine Las Bambas, which the company had forecast would produce 385,000 to 405,000 tonnes of copper this year. MMG, which is controlled by China Minmetals and headquartered in Australia, has already halted exports from the mine and said last week that it was gradually winding down production. Shares in MMG in Hong Kong rose earlier this week after the deal the company signed a deal with Rojas on Saturday built expectations that it would be able to resume normal operations at Las Bambas soon. But Rojas said later that he had to consult other villagers before it could become final.

Images on local TV showed villagers gathered in the countryside raising their hands when asked if they agreed to suspend the blockade for two days. A similar number held their hands in the air when asked if they wanted the community's three attorneys to be freed from jail, where a judge last week ordered them to remain for three years while they are investigated for allegedly trying to extort MMG. The lawyers deny wrongdoing. Paredes, who has been advising Fuerabamba since the arrests of the community's lawyers earlier this month, predicted the talks with the government would fail.

"I think the community thinks the government is going to going to pull a rabbit out of a hat or something, Paredes said by phone. Rojas and Fuerabamba's vice president did not immediately respond to requests for comment on Tuesday.

A spokeswoman for del Solar did not immediately respond to requests for comment about whether he was traveling to the region his week. No official announcement has been made. (Reporting by Mitra Taj; Editing by Sandra Maler & Simon Cameron-Moore)

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