Vale Voisey's strike talks break off over bonus

* Strike began Aug. 1, 2009

* Resolution of Vale Sudbury strike had raised hopes

TORONTO, July 20 (Reuters) - Vale (VALE5.SA: Quote) and the union representing striking workers at its Voisey's Bay nickel mine in eastern Canada have broken off talks aimed at ending the year-long stoppage, the United Steelworkers said on Tuesday.

The strike began Aug. 1, and hopes for a solution picked up earlier this month after the resolution of a parallel strike at Vale's larger mining and smelting complex at Sudbury, Ontario.

Boyd Bussey, a union staff representative, said talks broke down after the company offered a bonus system inferior to the deal given to workers in Sudbury.

"The proposed bonus system is unacceptable. It's based entirely on incentives rather than the present one based solely on the average realized price of nickel or the profitability of the company," he said.

"The company has also refused to discuss other outstanding issues on the table until the union agrees to the new bonus system," he added.

Voisey's Bay, located in the province of Newfoundland and Labrador, produced 77,500 tonnes of nickel and 55,400 tonnes of copper in 2008, the last year of uninterrupted mining.

Vale resumed partial production at Voisey's earlier this year using non-union workers and outside contractors at an annualized rate of about 19,000 tonnes of nickel and 15,000 tonnes of copper.

(Reporting by Cameron French; Editing by Frank McGurty)