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UPDATE 1-Protesters block roads at Southern Copper Peru

Wed Jun 11, 2008 1:20pm EDT

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LIMA, June 11 (Reuters) - Protesters blocked roads leading into Southern Copper's (PCU.N)(SPC.LM) Ilo smelter and Cuajone mine in Peru on Wednesday, as miners nationwide face growing demands from workers and communities.

The protesters live nearby and have demanded the miner, one of the world's largest copper producers, provide more financial assistance to their towns.

Laborers and the poor in the Andean country want a larger share of profits that mining companies are reaping from record prices for commodities. President Alan Garcia, whose approval ratings hover near 30 percent, is under pressure to make sure the benefits of a six-year economic boom reach the poor.

"Everything is blocked," said Roman More, head of the union at the Ilo smelter.

The company said the blockages had not yet hurt shipments or output.

"In the worst-case scenario, we'd have to suffer the protests for days before running into trouble," a company official said.

Southern, controlled by Grupo Mexico (GMEXICOB.MX), produced 30.2 percent of Peru's copper output last year, which totaled 1,190,281 tonnes. Its Toquepala mine was not affected by the protests.

In addition to the protests, More said there is a chance Cuajone could go on strike next week, which would occur in the run up to a nationwide strike called for June 30 by Peru's largest federation of mining unions.

On Tuesday, workers at Freeport-McMoRan's (FCX.N) Peruvian copper pit Cerro Verde (CVE.LM) went on strike over a contract dispute, though the mine's operator said output was steady.

The labor federation hopes to pressure Congress to pass a bill that would lift caps on profits that companies share with workers.

President Garcia has supported the bill in Congress, but his APRA party has failed to find enough votes in its coalition to make sure it passes.

Peru is the world's leading silver producer, ranks second in copper and zinc, and fifth in gold, according to government data. (Reporting by Teresa Cespedes and Terry Wade; Editing by Christian Wiessner)



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