LIMA, May 10 (Reuters) - Peru's government on Tuesday failed to reach an agreement with a group of indigenous communities whose protests have halted operations at MMG Ltd's massive Las Bambas copper mine.

Peru is the world's No. 2 copper producer and Chinese-owned Las Bambas produces about 2% of global supply. The prolonged suspension - which began almost three weeks ago - means both the company and Peru are missing out on millions in revenue and taxes at a time of historically-high copper prices.

In a tense meeting near the mine in the Peruvian Andes, community leaders said they would not allow the mine to resume operations unless the government lifted a state of emergency that it put in place in the area last month. The measure suspends the rights to assembly and protest.

"If you want dialog, first lift the state of emergency," said Edison Vargas, president of the Fuerabamba community, at the meeting, which was broadcast on social media.

But the government in turn said it first wanted a commitment from the communities that they would lift their protest and allow Las Bambas to restart.

The indigenous communities of Fuerabamba and Huancuire both sold land to Las Bambas to make way for the construction of the mine, but have recently accused the company of failing to honor all of its commitments. MMG says it has fulfilled about 80% of its commitments and the remaining ones are in the process of being fulfilled.

Last month, both communities entered their former lands and set up camp inside Las Bambas. Police and security personnel from the mine evicted Fuerabamba's camp but Huancuire's remains, making it impossible for the mine to operate.

Edgardo Orderique, general manager of operations at Las Bambas, said during the meeting that the government should maintain the state of emergency as long as the mine is unable to operate. (Reporting by Marcelo Rochabrun, Editing by Rosalba O'Brien)