By Diego Ore

LIMA, Oct 28 (Reuters) - Thousands of protesters in Peru's Moquegua province took three police officers hostage and blocked a bridge on the Pan-American highway on Tuesday to demand that Congress give their province a bigger share of mining taxes.

The protesters snarled traffic along the main road to the neighboring province of Tacna, and to Chile.

Moquegua and Tacna provinces are locked in a dispute over how to share mining taxes, paid mostly by Southern Copper Corp <PCU.N>, a unit of Grupo Mexico <GMEXICOB.MX> and one of the world's largest mining companies.

Four policemen were wounded, and three of them were taken hostage, said Emilio Contreras, a police colonel. Community leaders said at least 10 people were injured when police fired tear gas into the crowd.

Southern Copper, which operates the Cuajone mine and Ilo smelter in Moquegua and the Toquepala mine in Tacna, said its operations were not affected.

Tensions have simmered since June, when protesters in Moquegua took 60 police officers hostage to urge Congress to pass a bill overhauling how taxes are shared among provinces.

President Alan Garcia has supported the bill, but he lacks sway in Congress to pass it. The bill would assess taxes based on how much mineral wealth a mine produces, and scrap the current system, which levies taxes based on how much dirt a mine moves.

This year, Moquegua expects to receive 20 percent of taxes paid by Southern that are distributed to provinces, while 80 percent will go to Tacna. Politicians in both provinces say they need the revenue to pay for basic services.

Despite seven years of fast economic growth, some 40 percent of Peruvians live in poverty and critics say Garcia is facing protests because a boom in mining exports has yet to trickle down to the poor.

This month he named a prominent leftist, Yehude Simon, as his prime minister in the hopes of averting more protests, which have been held in at least three other provinces this week as Peruvians demand better access to water, taxes and infrastructure. (With additional reporting by Miguel Zegarra; Writing by Dana Ford, editing by Philip Barbara)

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