* Union calls for strike, warns of extended conflict
* BHP says willing to continue talks with union
* Bonus offer cut to $12,000, from $49,000 four years ago
* BHP maintains Escondida output forecast for FY2017 (Adds BHP comment, Escondida operations details)
SANTIAGO, Jan 24 (Reuters) - Unionized workers at BHP Billiton-run BHP.AX BLT.L Escondida, the world's biggest copper mine, said on Tuesday they rejected the company's latest wage offer and asked workers to vote for a strike and prepare for an extended conflict.
The Escondida workers' union, which represents about 2,500 laborers at the Chilean mine, has been in collective wage talks with the company since December to replace the current contract which expires at the end of January.
The tough bargaining at Escondida, seen as a benchmark for the copper industry, follows a more than 25 percent drop in copper prices since the last wage deal was reached four years ago. At the same time costs have risen as more rock has to be dug up to maintain copper yields, with the grade declining.
Talks four years ago ended with Escondida offering each worker a bonus worth some $49,000, the highest offered in Chile's mining industry. The company is now offering much lower bonuses of around $12,000 per worker.
The union has warned that if talks with the company are unsuccessful they could go on strike. company has presented its last offer today, which eliminates or modifies a series of benefits our union has fought for and won over the years," the union said in a statement.
"Considering this, the union's board has asked all of its members to vote en masse for a legal strike and to prepare themselves for an extended conflict," it said.
"The offer is absurd," union president Patricio Tapia told Reuters.
Workers will have between Jan. 27 and Jan. 31 to vote on the company's wage and benefits proposal.
"We reiterate the company's willingness to undertake a process that places emphasis on understanding and consensus, as the mission of both parties is to ensure that we maintain instances in which respect, calm and good faith prevail at all times," BHP said in a statement emailed to Reuters.
Under Chilean labor law, if direct talks between the company and workers fail, both sides can then request government mediation.
Escondida is controlled by BHP Billiton with a 57.5 percent stake, while Rio Tinto RIO.AX RIO.L owns 30 percent. The rest is owned by Japan's JECO 7768.T .
The mine's output for the half year ending Dec. 31 stood at 452,0000 tonnes, unchanged from the same period a year earlier, BHP said in its latest operational review. It still expects Escondida to produce 1.07 million tonnes for the year to June.