UPDATE 1-Leader of community blocking road to Peru copper mine arrested

(Updates with official confirmation)

LIMA, March 22 (Reuters) - Peruvian police said on Friday that they have arrested the leader and two lawyers of an indigenous community, accusing them of trying to extort Chinese miner MMG Ltd by blocking a road it uses to transport copper for the past month.

Gregorio Rojas, president of the community Fuerabamba, was arrested in Lima late on Thursday, along with the community's attorneys, brothers Frank and Jorge Chavez, the police said in a statement.

It was not immediately clear who the legal representatives were for Rojas and the Chavez brothers. Frank Chavez and Rojas have previously denied allegations by representatives of the mining industry that the road blockade aimed to illegally or unfairly secure money from MMG.

Fuerabamba has said MMG built the road on its farmland without its permission, and that the government illegally made it a national highway last year to help MMG, which is controlled by state-owned China Minmetals Corp Ltd. The government and MMG deny the allegations.

Rojas told Reuters this month that Fuerabamba asked MMG for 40 million soles ($12 million) for the rights to use the road.

The arrests came as talks between the three parties reached a stalemate. The government had demanded an end to the blockade before discussing the community's demands any further.

MMG said it respects decisions by Peru's judicial system and was open to dialog. It reiterated that the road blockade had halted its exports of copper but that production has not yet stopped.

Las Bambas is one of Peru's biggest copper mines, with about 385,000 tonnes in output last year.

Fuerabamba, a Quechua-speaking community that once farmed and herded animals in Peru's southern Andes, was relocated to a new town near Las Bambas earlier this decade so that the mine could be built.

Fuerabamba has repeatedly accused MMG of failing to fulfill its commitments in the relocation agreement. In early February, community members camped out along a stretch of the road on its farmland to block MMG's trucks carrying copper concentrates to the port of Matarani on Peru's Pacific coast.

Former Fuerabamba President Alfonso Vargas said by telephone on Friday that the blockade would continue despite the arrests.

As part of the same operation, police said they had arrested two others and seized dynamite, guns and bullets from 12 properties in Lima and the region of Apurimac, where Las Bambas is located. The police statement did not specify whose property the weapons were seized from or how they related to the alleged extortion. (Reporting by Mitra Taj and Marco Aquino; Editing by Richard Chang and Sandra Maler)