July 3rd (Guardian) – Workers at Peru’s third-largest copper pit threw their weight behind a nationwide strike that entered its third day on Wednesday, as miners in hard hats marched through Lima to demand a bigger slice of corporate profits.
Global copper prices rose to a two-month high on worries the strike would crimp supplies from the world’s No. 2 supplier. Meanwhile, stock prices of mining companies sank as strikers pressed Congress to pass a bill that would force companies to share more of their record profits with workers.
The walkout is the latest sign that President Alan Garcia faces growing calls to spread the wealth to workers and the poor, or risk losing support for his free-market policies at a time when left-wing parties are eyeing elections in 2011.
“The profits belong to us,” said Eliza Guerra, 28, who runs heavy machinery at the Antamina mine. “The price of copper is at the highest its ever been and we generate that wealth.” Workers at Freeport-McMoRan’s Cerro Verde copper pit, Peru’s third-biggest, approved plans to go on strike in a final round of voting, the union said. Freeport’s shares fell nearly 7 percent to $107.57.
“On Saturday, we will go on strike, no matter what,” Leoncio Amudio, the union head at Cerro Verde, told Reuters. Workers at Newmont’s gold mine Yanacocha were still deciding if they would strike, while laborers at Volcan’s Cerro de Pasco zinc mine chose to stay at work in a first-round vote, but another round of voting remains, union leaders said. Newmont’s shares lost 4.5 percent to $50.99.
Laborers were off the job at Doe Run Peru’s small copper mine Cobriza, but its La Oroya smelter was operating normally, a company official said. The strike hit the Cuajone mine and Ilo smelter of Southern Copper, though the company said output was largely unaffected. Its shares dropped more than 5 percent to $101.54.
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 labor bill soon, while most legislators are away on recess.
As the government pushed Congress to approve the bill, it also declared the strike illegal, a ruling it normally makes during walkouts to persuade workers to return to work. If workers fail to return to their jobs within a week or two, the companies could fire them.
Failure to pass the bill could lead to more walkouts, and Peru’s largest labor confederation is planning a general strike for July 9.
MINES ON STRIKE
Since the strike started on Monday, walkouts have hit some key mines but affected production only at a couple as some companies called in temporary workers. Though share prices of key miners appeared to be affected by the strike, Peru’s five-year credit default swaps were flat at roughly 129 basis points, as the walkout had yet to create serious worries among investors about the Andean country’s economic health.
The mine suffering the most was the Uchucchacua silver mine of Peruvian miner Buenaventura, which said the pit was halted. Miners at Peru’s largest copper-zinc pit, Antamina, owned by BHP Billiton, were also on strike and its shares fell more than 4 percent. But a company official said its effect on production was minimal.
Shougang Hierro Peru, an iron ore miner, and the Pierina mine of Canada’s Barrick Gold were also hit by walkouts, according to union officials. Barrick’s larger Lagunas Norte mine, which relies on temporary workers, was not affected, and the company said Pierina was operating. Workers were also on strike at Volcan’s Andaychagua silver-zinc mine, though workers at its other mines have not yet joined the protest.
Miners were on strike at Peruvian producer Minsur’s San Rafael mine, one of the largest tin mines in the world, a union member said, along with staff at its smelter. Milpo, a zinc, lead and copper miner, said none of its mines was affected by the strike.