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UPDATE 1-Peru mining unions call nationwide strike

Thu May 29, 2008 9:51pm EDT

(Recasts, adds business reaction, details)

LIMA, May 29 (Reuters) - Peru's largest federation of mining unions said it would hold a nationwide strike starting on June 16 after Congress delayed voting on a bill to improve labor benefits on Thursday.

Congress was expected to vote on the bill to lift the caps on profits that companies share with workers, one day after pleasing unions by passing a law to clamp down on outsourcing.

But voting on the profit-sharing bill was blocked when a group led by the Peruvian Nationalist Party maneuvered to send it back to committee and tie it up, angering unions in one of the world's largest mining countries.

"We will talk to our members June 5 and 6 and on the 16th we will be going on a general strike," Luis Castillo, the head of the federation, said at Congress. "Lots of legislators who say they are pro-labor showed their true colors today."

Castillo harshly criticized the left-wing Nationalist Party for objecting to the bill, which would have reduced tax revenues for regional governments by steering more cash into the pockets of workers.

Many governors in the interior of the country, where there are lots of mines, belong to the Nationalist party. The conservative National Union Party also blocked the bill, along with a party founded by former President Alberto Fujimori.

Earlier this month, President Alan Garcia's APRA party averted a strike set for May 12 by promising Castillo it would help push the bills through Congress.

Mining unions went on strike twice last year at mines across the Andean country to pressure Congress to restrict non-union jobs in the sector and to give workers a greater share of windfall profits, which unions say is their biggest demand.

The strikes partially cut output and pressured international metals prices.

Peru is the world's leading silver producer, ranks second in copper and zinc, and fifth in gold, according to government data.

Mining unions have also asked the government to change rules for early retirement and give workers the right to enroll in state-run pension funds. In addition, they want the work day cut to eight hours from 12 hours. (Reporting by Terry Wade and Teresa Cespedes; Editing by Gary Hill)



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