Union support slips for Peru mining strike

By Jean Luis Arce and Marco Aquino

LIMA (Reuters) - Union support sank for Peru's nationwide mining strike on Thursday, while workers from other mines said the walkout would go on until Congress passed a bill to give them a bigger slice of corporate profits.

Since the strike started on Monday, global copper prices have risen to record highs on worries it would crimp supplies from the world's No. 2 supplier.

The walkout is the latest sign that President Alan Garcia faces growing calls to spread the wealth from a six-year economic boom 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 strike is clearly weakening," Peru's Labor Minister, Mario Pasco, told Reuters. He said only about 10 percent of all mine workers in Peru had downed tools, but that production was affected by a smaller percentage.

Unions at three mines and a smelter said they were returning to work or canceling plans to join the strike.

Laborers went back to work at the Ilo smelter of Southern Copper, Peru's biggest producer, though the strike continued at its Cuajone mine, where the company has said output has been mostly unaffected.

The strike was lifted at iron ore miner Shougang Hierro Peru, the company and the union said.

Workers at Freeport-McMoRan's Cerro Verde copper pit, Peru's third biggest, scrapped plans to join the national strike, but the union said it might hold its own walkout next week to force the company to give workers better benefits.

Laborers at Volcan's Cerro de Pasco zinc mine chose to stay at work after two rounds of votes, a union chief said on Thursday, while workers at its Andaychagua zinc mine called off their strike.

Miners at Newmont's Yanacocha gold mine were still deciding if they would walk off the job, a union leader said.

Workers were on strike at Doe Run Peru's small Cobriza copper mine, but its La Oroya smelter was operating normally, a company official has said.

Leaders of the federation of mining unions that called the nationwide strike said the walkouts would continue.

Garcia's approval rating is hovering near 30 percent and his chief of staff has asked the permanent commission of Congress to vote soon on a labor bill that mining unions are pushing, while most legislators are away on recess.

As the government pleaded with 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.

The labor federation has said it will appeal the ruling.

Mining unions that marched to Congress on Thursday called on Congress to pass the bill, which would lift caps on profit-sharing. They also want a shorter work day and improved retirement rules.

Failure to pass the bill could lead to more walkouts, and Peru's largest labor confederation is planning a general strike for July 9.

So far, the nationwide strike has hit some key mines but affected production at only a couple as some companies have called in temporary workers.

For a detailed list of production at all key mines in Peru and ones hit by the strike, click here:

(Additional reporting by Dana Ford, Teresa Cespedes and Maria Luisa Palomino; Writing by Terry Wade; Editing by Christian Wiessner)

Terra/Reuters