Southern Copper, Peru workers reach salary accord

LIMA, Oct 27 (Reuters) - Workers at Southern Copper, one of the world's largest copper producers, reached a wage agreement with the company after Peruvian government mediation, union leaders and government officials said on Saturday.

Workers suspended an eight-day strike in early October to allow the Labor Ministry to intervene in the conflict. The government set salary increases of 11 percent in the first year and 5 percent annually in the following two years.

The workers had sought a 12 percent increase in the first year, while the company had offered 7.8 percent, the ministry's inspections director, Jorge Villasante, told Reuters.

Southern Copper Corp. (SPC.LM: Quote, Profile, Research, Stock Buzz)(PCU.N: Quote, Profile, Research, Stock Buzz), controlled by Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research, Stock Buzz), operates Peru's Toquepala and Cuajone copper mines, along with the Ilo refinery.

"The (government) resolution is nearly exactly what the workers wanted; it did not meet 100 percent of demands but I think it has been beneficial to workers," said Arnaldo Oviedo, a union leader at Ilo.

"This must be submitted to a workers' assembly (for approval), but I think the workers will not be disappointed," he added.

Southern Copper officials were not immediately available for comment, but chief executive Oscar Gonzalez vowed on Thursday that the company would comply with the government decision.

Southern Copper also operates the Cananea and La Caridad mines in Mexico.

Peru is the world's No. 3 copper producer.

(Additional reporting by Jean Luis Arce)