(Adds analyst comment and dateline, updates prices)

By Eric Onstad

LONDON, Aug 4 (Reuters) - Copper prices rose 1% on

Monday on supply fears after a fatal mining collapse in Chile,

the world's biggest producer, but gains were capped by concerns

over the global economy.

Three-month copper on the London Metal Exchange

reached $9,722.50 a metric ton by 0930 GMT, building on Friday's

modest gains.

LME copper has rebounded by a fifth since touching its

lowest in more than 16 months in April but has retreated from a

high of more than $10,000 in early July.

Chilean copper giant Codelco halted mining at its El

Teniente mine last week after a tremor and collapse that killed

six workers.

The mining minister said on Sunday that officials would

determine when it was safe for operations to resume at the mine

that last year produced 356,000 tons of copper.

Another potential supply issue emerged in Japan, where

Mitsubishi Materials ( MIMTF ) said on Monday that it was

considering scaling back copper concentrate processing at its

Onahama smelter and refinery.

"That does underpin the price and help offset some of the

economic growth concerns after Friday's jobs report," said Ole

Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

U.S. jobs data on Friday was weaker than expected,

suggesting a sharp deterioration in labour market conditions.

"It does show a trend that tariffs are having an impact and

we've probably just seen the tip of the iceberg. That will put

the market on the defensive in the short term," Hansen said.

The most traded copper contract on the Shanghai Futures

Exchange gained 0.1% to 78,330 yuan ($10,915.70) a ton.

Among other metals, LME aluminium added 0.5% to

$2,579.50 a ton, zinc advanced 0.9% to $2,750.50, nickel

rose 0.3% to $15,025, lead edged up 0.2% to

$1,975.50 and tin was up 0.3% at $33,465.

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($1 = 7.1759 Chinese yuan renminbi)