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UPDATE 3-Nationwide mining strike stumbles in Peru
October 19, 2009 / 11:36 AM / 8 years ago

UPDATE 3-Nationwide mining strike stumbles in Peru

* Strike hits Buenaventura, Barrick, Volcan

* Walkout has limited support

* Southern Copper, BHP Billiton work normally

* Xstrata, Newmont mines open (Recasts, adds quotes, details)

By Patricia Velez and Terry Wade

LIMA, Oct 19 (Reuters) - A nationwide strike by Peruvian miners drew limited support on Monday as laborers stayed on the job at key copper and gold mines, even as they demanded the government pass laws to improve benefits.

Union leaders said the walkout hit mines of Buenaventura, Barrick and Volcan, but those of global heavyweights such as Southern Copper, Freeport, BHP Billiton and Newmont operated normally. [ID:nN19369993]

“The strike is for better benefits, on retirement ages and profit-sharing, which we’ve been demanding for three years and so far we’ve got nothing,” Luis Castillo, director of the mining federation, told Reuters.

Peru is a leading global minerals exporter and the national federation of mining unions is upset that President Alan Garcia rejected a law, passed by Congress, to lower the age for retirement.

Private-sector pension funds would have had to pay out millions of dollars in extra benefits if Garcia had signed the law.

Workers also want Congress to throw out a rule that limits the amount they can earn from profits that are distributed to them by companies. Currently, the ceiling is 18 monthly salaries, but during the latest boom the miners said they should have received more.

The last time miners across Peru downed tools was in mid- 2008 and the strike helped push copper prices toward a record high.

Globally, Peru ranks No. 1 in silver output, No. 2 in zinc, No. 3 in copper and tin, No. 4 in lead and No. 6 in gold.

The walkout was held as minerals prices have gained ground since crashing in late 2008, and mining companies are expected to see higher third-quarter profits after a tough first half of this year.

Buenaventura’s (BUEv.LM) (BVN.N) Orcopampa and Uchucchacua mines were halted by the strike, and its shares were down 3.65 percent at $37.50.

Global prices for gold XAU= and copper MCU3 were mainly being supported by the weak U.S. dollar.

Workers at Barrick’s (ABX.TO)(ABX.N) Peruvian gold mines also walked off the job, union officials said. A Barrick official said output was not cut.

Volcan (VOL_pb.LM), one of Peru’s top zinc and silver producers, saw its key mine Cerro de Pasco hit by the strike, said union leader Gonzalo Cristobal. A company official said production was not impacted.

LEADING MINES OPEN

The Yanacocha gold mine of Newmont Mining (NEM.N) operated normally, union official Guillermo Nina said. Workers had planned to strike, but they are are heading into talks for a new labor contract and ended up staying on the job, Nina said.

“The contract talks will require us to be strong,” Nina said. “But if Garcia doesn’t support the changes, then we’ll go on strike.”

Laborers reported to work at the key mines and smelter of Southern Copper (SPC.LM) PCU.N and Xstrata XTA.L and BHP Billiton’s (BHP.AX)(BLT.L) Antamina, union officials said.

Xstrata’s Tintaya copper mine was also open, a union leader said.

Freeport-McMoRan’s (FCX.N) Cerro Verde mine, one of Peru’s main copper pits, was working normally as laborers decided at the last minute to show up for their jobs. (Reporting by Patricia Velez and Dana Ford; Editing by Terry Wade and Jim Marshall and Lisa Shumaker)

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