MAC: Mines and Communities

Workers Strike At Latin America's Biggest Gold Mine

Published by MAC on 2006-04-17

Workers strike at Latin America's biggest gold mine

by Marco Aquino, LIMA, Peru (Reuters)

17th April 2006

Workers demanding better benefits went on strike on Monday at Latin America's biggest gold mine, Yanacocha, a site that has been a flash point of anti-mining anger by Peruvian environmentalists and poor farmers.

Miners walked off the job, calling for improved health, education and housing benefits. A source at the mining company said only about 100 of some 660 unionized laborers had "abandoned their posts," while a union official said earlier in the day that 1,000 workers were striking.

Peru's Labor Ministry said the strike was illegitimate because the union did not gather enough workers' signatures to back the protest, a ministry spokesman said.

The work stoppage is the latest to hit Peru's mining industry -- one of Latin America's most dynamic. In recent years, farmers have protested against planned projects over worries about their environmental impact, and workers have carried out strikes demanding better pay as international mineral prices have climbed.

"We are not demanding a salary increase but better benefits," Reginal Arenaza, a Yanacocha workers union official, told Reuters.

Arenaza said production had been halted, but the company source said the mine was operating "normally" thanks to a contingency plan. The source requested anonymity, saying the company planned to issue an official statement later on Monday. She said talks with the union were continuing.

The strike by miners at Yanacocha came on a day when gold prices hit a new 25-year high at $615.80 an ounce.

Controlled by the Denver-based Newmont Mining Corp. and Peru's Buenaventura ), Yanacocha produced around 3.3 million ounces of gold last year. Output at the mine yields nearly half of the gold in Peru, the world's fifth-largest producer.

Yanacocha officials said they forecast the mine could produce 2.6 million ounces this year and 2.5 million ounces in 2007.

Mining forms part of Peru's economic backbone, responsible for more than half of its hard currency earnings.

But in the Peruvian interior, where many mines are located, Andean communities are highly wary of mining, and protests against companies have forced some projects to be abandoned as farmers fear the destruction of their land and see little benefit from companies making big profits.

Activists say communities near mines lack sufficient drinking water and sanitation, while schools and hospitals are often in crumbling disrepair following years of government neglect.

Tapping public anger over mining, former army commander Ollanta Humala finished first in Peru's presidential election last week, vowing to levy a windfall tax on companies that earn "excessive" profits. The vote is headed to a runoff since no candidate won more than 50 percent of the balloting.

Workers have also added their voice to the protests, saying they should receive better pay and work conditions, citing soaring mineral prices on global markets.
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