Nov. 5 (Bloomberg) -- Copper prices rose to a 28-month high after workers went on strike at a mine in Chile, the world's largest producer of the metal. The walkout at Collahuasi, the world's fourth-largest copper mine, started at 7 a.m. New York time after wage negotiations failed, said Jacqueline Cerda, a union official. Inventories of copper in warehouses monitored by the London Metal Exchange have declined 27 percent this year to the lowest level since October 2009. "Coming on top of an already tight market, the strike news just adds to the potential for higher copper prices," said David Thurtell, an analyst at Citigroup Inc. in London. Copper futures for December delivery advanced 6.75 cents, or 1.7 percent, to $3.9795 a pound at 11:04 a.m. on the Comex in New York. Earlier, the price reached $3.9955, the highest level for a most-active contract since July 3, 2008. Copper touched a record $4.2605 in May 2008. The Federal Reserve said on Nov. 3 it will purchase an additional $600 billion of Treasuries through June to bolster the U.S. economy, a move that traders said will erode the value of the dollar. "The ongoing perception that commodities are to be bought as 'hard-asset' hedge against the sinking dollar" supported prices, Edward Meir, an analyst at MF Global Holdings Ltd. in Darien, Connecticut, said today in a report. On the London Metal Exchange, copper for delivery in three months rose $132, or 1.5 percent, to $8,731 a metric ton ($3.96 a pound). Copper on the LME may reach $9,000 if the strike lasts for a month or two, Citigroup's Thurtell said. Collahuasi, owned by Xstrata Plc and Anglo American Plc, accounted for 3.5 percent of global output last year, according to Standard Bank Plc. Lead, nickel, aluminum, zinc and tin also gained on the LME. --With assistance from Matt Craze in Santiago. Editors: Steve Stroth, Patrick McKiernan.

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