* Union accepts mediation for Escondida strike
* Dollar rebounds on Yellen rate hike comments
* Protest in north China over building of aluminium plant
* Data indicates Chinese credit growth remains strong (Updates with closing prices)
By Eric Onstad
LONDON, Feb 14 (Reuters) - Copper slipped into the red on Tuesday on hopes strike talks would restart at the world’s biggest copper mine in Chile while aluminium touched its highest in 21 months on renewed concerns about potential closures of Chinese smelters to cut pollution.
Also pressuring base metals was a stronger dollar, which rebounded after Federal Reserve Chair Janet Yellen said it would be unwise to wait too long to raise U.S. interest rates.
Benchmark copper on the London Metal Exchange closed down 1.4 percent at $6,021, pulling back from a session high of $6,190 and after hitting its highest since May 2015 on Monday at $6,204.
Striking workers at Chile’s massive Escondida copper mine have accepted a government invitation to try to resume dialogue with mine operator BHP Billiton as the strike entered its sixth day on Tuesday.
Traders said the news hit a market worried that funds who have taken bullish positions might be ready to sell on any signal that the strike may be concluded.
“The markets are very nervous and when it looked like someone sold a large amount, that just swept the market down. Any move down will attract some panic sellers,” a trader in London said.
There was no guarantee, however, that the two sides would make progress in the mediation.
“There’s quite a wide gap between what workers are wanting and what BHP is offering,” Warren Patterson, commodities strategist at ING in Amsterdam, said.
Offering some support to copper were persistent supply issues in Indonesia, where an export ban remained in place.
Freeport-McMoRan Inc has halted production of concentrate at Grasberg in Indonesia, the world’s second-largest copper mine, in a long-running dispute over investment guarantees.
Aluminium bucked the weaker trend and ended up 0.9 percent at $1,887, paring gains after touching a session peak of $1,907, a high since May 13, 2015.
In a sign of growing public anger about pollution, hundreds of residents in a northeastern Chinese city protested against the building of an aluminium processing plant.
This came a day after Reuters reported a draft policy document showed that the world’s biggest metals consumer was considering forcing steel and aluminium producers to cut more output as Beijing intensifies its war on smog.
“If the proposed measures are applied this should impact a significant proportion of current China steel and aluminium output,” Alastair Munro at broker Marex Spectron said in a note.
Elsewhere, lead dropped 2.7 percent to close at $2,355.50, zinc dipped 0.5 percent to $2,903, nickel added 0.4 percent to $10,770 and tin fell 0.4 percent to $19,925.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin (Reporting by Eric Onstad. Editing by Jane Merriman and David Evans)