* Miners pushing for bargains from contract, supply companies
* Slumping commodity prices have hit miners globally
* Peru’s Buenaventura cuts forecast 2015 silver output (Recasts; adds comment, detail)
AREQUIPA, Peru, Sept 23 (Reuters) - Mining companies in Peru are wringing bargains from contract and supply companies to weather slumping mineral prices, the head of the country’s main mining association said Wednesday.
But competitive operating costs still put mines in Peru at a safe distance from possible closures, said Carlos Galvez, president of the National Society of Mining, Petroleum and Energy.
The reliance of supply and service companies on miners gives them little room to resist demands for slashed fees, Galvez said.
“Do you want to earn very little or do you want to lose everything?” Galvez said, summarizing the ultimatum more miners are making as metal prices slide.
“Because if I fail you run out of work,” Galvez said on the sidelines of a mining conference.
Galvez, who is also vice president at Peruvian precious metals miner Buenaventura , said his company had recently cut spending on outsourced services and supplies.
“You tighten or die,” Galvez said, declining to specify how much Buenaventura had lowered costs.
Peruvian silver and zinc miner Volcan said earlier on Wednesday that it had reduced its contract personnel by 30 percent as part of “austere” measures needed to offset price slumps.
Peru, the world’s third-largest copper producer, is in a much better position than top producer Chile to withstand the price shock, Galvez said.
Lower energy costs, more water, cheaper labor and newer, open-pit mines will all help keep Peruvian mines open, Galvez said.
Galvez added that Buenaventura would likely produce 23 million ounces of silver this year, 500,000 ounces less than previously expected due to a month-long strike at its Uchucchacua mine in May.
The company’s silver output is expected to rise to 24 million ounces in 2016, while a new mine, Tambomayo, will help push production to 27 million ounces in 2017, Galvez said.
Last year Buenaventura produced 19.7 million ounces of silver.
Galvez said the company still expected to produce around 800,000 ounces of gold this year.
Reporting by Mitra Taj and Teresa Cespedes; Editing by Lisa Shumaker and Joseph Radford