SANTIAGO (AFP) -- The Chilean government has stepped into an escalating labor dispute at the world's biggest copper mine after its operator, Anglo-Australian resources giant BHP Billiton, shut operations and broke off negotiations with striking workers.

With the crippling strike at the Escondida Mine in its 12th day, President Michelle Bachelet sent Labor Minister Osvaldo Andrade into the fray to mediate.

By the afternoon, company and union representatives were back at the bargaining table, meeting behind closed doors in the city of Antofagasta, the embarkation point for copper mined at the Escondida Mine, after nudges from the government, officials said.

BHP Billiton said it had been forced to close the Escondida Mine in northern Chile because of safety concerns over actions taken by striking workers and would pursue legal actions against union workers who blocked access roads to the mine.

"This is illegal pressure," Pedro Marin, a spokesman for the striking miners, told AFP. He accused BHP Billiton of trying to "scare" workers.

Labor Minister Andrade said earlier he was maintaining phone contact with regional authorities in Antofagasta. The mine, which produces eight percent of the world's copper output, is located nearby in the Atacama Desert.

"If it's necessary to take other measures, we will do it in due time," Andrade said, without providing details on his mission.

News of the supply disruption pushed already-high world copper prices sharply higher. The metal in London was fetching more than 7,500 dollars per tonne, up from 7,290 dollars late Thursday. On Wednesday Bachelet had signaled the government's readiness to intervene in the crippling strike, couching the politically loaded offer delicately: "It's an issue between private parties."

BHP Billiton, the world's largest miner, announced early Friday that it had closed operations indefinitely at the Escondida Mine and had ended negotiations with striking workers.

BHP Billiton said it would take legal action against union workers who had blocked all access roads to the mine to keep out non-union workers. The blockages had led to a clash with police late Thursday.

"This heightened union activity means we no longer feel that we are able to unequivocally guarantee the health and safety of our people or the integrity of the operations, infrastructure," said spokeswoman Emma Meade. "As a result, Minera Escondida has today closed its operations and ceased negotiations with the union. We will not negotiate with the union while they are carrying out this illegal activity."

The mine's 2,052 unionized workers, representing 97 percent of the work force, went on strike on August 7 in a dispute over wages.

Miners are demanding a 10 percent wage increase and a 30,000-dollar bonus, which they say reflects a tripling in global copper prices since the previous collective bargaining agreement, reached three years ago.

The company has offered workers a 3.0 percent wage increase and a 16,000-dollar bonus.

The miners say the company could easily meet their demand amid skyrocketing copper prices, but BHP Billiton claims the dramatic rise in copper prices is temporary and bears no relation to the productivity of the mine or its workers.

On BHP Billiton's orders, the mine's operations ended at 8:00 am (0200 GMT) with the departure of some 300 non-union workers.

The company had been operating the mine during the strike at 40 percent of processing capacity and 10 percent extraction capacity.