UPDATE 1-Peru mining strike ends after nearly one week

(Recasts, adds union confirmation)

By Teresa Cespedes

LIMA, July 6 (Reuters) - Peru's largest federation of mining workers decided on Sunday to end its nationwide strike after nearly one week, union leaders and the country's vice minister for labor said.

Mine workers, hoping to grab a bigger slice of sky-high metals prices, held the walkout to demand Congress pass a bill that would lift caps on profit-sharing. They also wanted a shorter work day and improved retirement rules.

"The mining federation has handed in a document saying they will be lifting the strike tonight," Vice Minister Jorge Villasante told Reuters.

He met with union leaders on Sunday to try to forge an agreement to end the walkout, which included a promise that the government would lower minimum retirement ages for mine workers.

"The strike ends at midnight," Vidal Espinoza, a labor leader, told Reuters.

Global copper prices MCU3 rose to record highs last week amid worries that supplies from Peru, the world's No. 2 supplier, would be crimped. Peru is also a leading exporter of precious metals, zinc and lead.

The nationwide strike hit some key mines owned by global mining companies, but production was only affected at a few mines as managers called in temporary workers.

Support for the strike had also been weakening before it was called off. Workers from at least five mines and a smelter had dropped out of the strike by Friday, including laborers at the giant copper-zinc mine Antamina, owned by Xstrata (XTA.L) and BHP Billiton (BHP.AX) (BLT.L).

Still, the protests were the latest sign that President Alan Garcia faces growing calls to spread the wealth from the country's six-year economic boom to workers and the poor, or risk losing support for his free-market policies at a time when leftist parties are regrouping for elections in 2011.

GENERAL STRIKE

Garcia's approval rating is hovering near 30 percent and his chief of staff has asked the permanent commission of Congress to vote on the profit-sharing bill soon, while most legislators are away on recess.

Failure to pass the bill in Congress could lead to more labor unrest, and Peru's largest labor federation is planning a one-day general strike for Wednesday.

"The government's economic policy just benefits small, privileged groups," said Mario Huaman, secretary general of the CGTP, the union confederation organizing the one-day walkout that will include workers from a broad range of industries. "The government only listens when there is a protest," he said on Friday.

Garcia says unions risk frightening foreign investors, who he says have helped turn Peru into one of the fastest-growing economies in the world by pouring billions of dollars into mining, petroleum and construction. Peru expanded 9 percent last year.

"The only thing this is going to do is scare away investors," Garcia has said. (For a detailed list of production at major Peruvian mines and those hit by the strike, double-click: [ID:nN02364293]) (Writing by Terry Wade; Editing by Clarence Fernandez)