UPDATE 1-Thousands block roads in Peru to pressure president
(Adds details on Cerro Verde strike, paragraph 13)
By Terry Wade
LIMA, June 12 (Reuters) - Thousands of people blocked roads in one of Peru's top mining regions on Thursday, rolling boulders onto highways to demand President Alan Garcia bring the benefits of an economic boom to the poor.
More than 5,000 people in the province of Moquegua shut Peru's main route to Chile and severed access to a mine and smelter of global mining firm Southern Copper (PCU.N)(SPC.LM), the country's largest copper producer, police and radio said.
The protests were the latest in a string of setbacks for Garcia, who faces mounting calls to do more to spread the wealth from six years of fast economic growth.
Failure could further undermine support for his government's pro-market policies and boost the chances of a left-wing candidate at Peru's next presidential election in 2011.
Peru's poverty rate, while falling, is nearly 40 percent. Many say the economic boom has passed them by even as mining companies reap huge windfall profits.
"Everything is stopped and nearly everybody, including the provincial governor, supports the protests," said Eduardo Arias of Radio Americana, a radio station in Moquegua.
Local residents say they want a bigger share of taxes that Southern Copper pays to the government, and a dozen mayors in the province declared a hunger strike to press their demands.
Garcia's chief of staff, Jorge del Castillo, tried to broker a settlement with the governor of Moquegua.
"We need to reach a deal that would end the protests affecting thousands of people," Del Castillo said.
Despite the strong economy, Garcia's approval rating stands at about only 35 percent and his governing coalition in Congress has fallen into disarray in recent weeks.
His APRA party failed to muster enough support last month to pass a bill to improve benefits for mine workers by eliminating caps on profits that companies share with laborers.
The largest federation of mining unions is threatening to shut down Peru's traditional economic engine by going on a nationwide strike on June 30 unless the bill is approved.
Workers at the Cerro Verde mine, which produces a quarter of Peru's copper, failed on Thursday to reach a deal with management to end a walkout heading into its fourth day, a mediator said. Freeport-McMoRan (FCX.N), the mine's owner, has said production remains steady.
Businesses have also started to criticize Garcia, who took office in 2006.
Confiep, the country's main business chamber, which has strongly supported Garcia in the past, complained that a bill passed by Congress to clamp down on the use of outsourced workers would drive up their costs and put some firms out of business.
Moquegua residents blamed the government on Thursday for allowing the neighboring province of Tacna a bigger share of tax revenue from Southern Copper than Moquegua.
The protests showed no signs of letting up as Luis Gonzales Posada, the head of Congress and a leader of Garcia's party, said he was sorry for allowing a fight to break out between two congresswomen on Wednesday and for not passing more bills.
"We apologize to the country and ask for forgiveness," he said. (Additional reporting by Maria Luisa Palomino; Editing by Kieran Murray and Peter Cooney)
