Kazakh copper miners end 3-day underground strike

ALMATY Sun May 6, 2012 1:35pm EDT

ALMATY (Reuters) - About 300 Kazakh miners called off an underground strike on Sunday, accepting a promise of higher wages from employer Kazakhmys (KAZ.L) after a three-day protest that unnerved authorities in the Central Asian state following deadly riots in an oil town.

London-listed Kazakhmys, the world's No. 11 copper producer, said all of the striking miners had come out of the mine in central Kazakhstan after senior managers agreed to raise wages and promised not to punish workers for the dispute.

"The labor dispute at the Annensky mine is over. The mine is returning to work," Kazakhmys, part of Britain's benchmark FTSE 100 index .FTSE, said in a statement.

About 80 miners failed to leave the mine after their Friday shift at Annensky finished. They were joined by more than 200 workers from two nearby mines owned by Kazakhmys, a source at the company said, requesting anonymity.

Authorities in Kazakhstan, a former Soviet republic of 16.7 million, are especially wary of labor unrest in single-industry towns after a months-long dispute involving sacked oil workers last year erupted into the country's worst violence in decades.

At least 14 people were killed in clashes in December when police used live ammunition against protesters in the oil town of Zhanaozen. The unrest posed the most serious challenge to President Nursultan Nazarbayev in his more than 20 years in power.

That violence was preceded by months of protests by nearly 2,000 oil workers sacked by KazMunaiGas Exploration Production RDGZ.KZ (KMGq.L) after going on strike in May. The oil company had said the strikes were illegal.

Kazakhmys has so far adopted a more conciliatory stance with the miners at Annensky, one of six underground mines near the central Kazakh city of Zhezkazgan that fall under its control.

"Kazakhmys management has expressed its willingness to meet the key requirements put forth by workers in a collective letter, including the issue of raising wages," the company said in an earlier statement.

It said a crowd that gathered near the mine's administrative headquarters had dispersed.

NO SANCTIONS

Three senior managers, including Chief Executive Oleg Novachuk, held talks with representatives of the striking miners and sent a letter to local prosecutors and officials requesting the sit-in be treated as a labor dispute, Kazakhmys said.

"The Kazakhmys representatives guaranteed that no sanctions would be taken against workers in the event that they adopt a constructive approach to the labor dispute," Kazakhmys said in a statement issued earlier on Sunday.

The six underground mines and a single open-pit operation around Zhezkazgan contribute about 70 percent of the company's mined ore. Mining at Annensky had been halted for two days as a result of the dispute.

The company source, speaking by telephone, told Reuters that workers from the Yuzhny and Vostochny mines had descended into the Annensky mine in solidarity after their own shifts ended. Production at Yuzhny and Vostochny was not affected, he said.

Security had earlier been tightened around the mine's explosives warehouse.

Kazakhmys said it had increased pay across the entire group, including miners' salaries, by an average of 20 percent in 2010. Since February 2011, it had offered performance-related bonuses of up to 15 percent, it said.

The average monthly salary for Kazakhmys miners was about 240,000 tenge ($1,622), nearly three times the national average, the company source said.

(Editing by Louise Ireland)

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