Southern Copper Unions May Strike, Back Peru Protests (Update1)

[Joanne98]

By Alex Emery

June 17 (Bloomberg) -- Southern Copper Corp.'s Peruvian workers may strike on June 23 in support of protests over legislation that would reduce regional government's income from mining taxes, a union official said.

Workers at Southern Copper's Ilo smelter and Toquepala and Cuajone mines will support attempts to block the measure, Ilo union leader Arnaldo Oviedo said today in a telephone interview.

Protesters in the southern coastal region of Moquegua, where most of Southern Copper's operations are based, have burned government offices and blocked roads in the past eight days. A bill being considered in Congress seeks to base a mining levy on earth moved instead of minerals produced and would result in less tax revenue for the regional government. The demonstrators include local residents and construction workers.

``Things are very hot here after police provoked protesters with tear gas yesterday,'' Oviedo said from Ilo, 850 kilometers (530 miles) southeast of Lima. ``We will go on strike unless a solution is reached for the region.''

Cabinet Chief Jorge del Castillo met today with Jaime Rodriguez, president of the Moquegua regional government, after protesters yesterday took dozens of police officers hostage, said Edmundo Gonzalez, a spokesman for Castillo's office.

Tourists Evacuated

The strike has cost Peru's southern region more than 40 million soles ($14 million) in lost business and tax income, according to the Tacna Chamber of Commerce. Hundreds of tourists were flown to Lima in military planes yesterday after protesters blocked roads, bridges and tracks in Moquegua with rocks and burning tires, Lima-based Radioprogramas reported.

``What is happening in Moquegua shows us that law and order, freedom of transit and the right to work have been violated,'' Southern Copper Chief Executive Officer Oscar Gonzalez Rocha said in an e-mail. ``We urge Peru's authorities to find a solution as soon as possible, restoring order and the principle of authority.''

Peru's Mining Federation plans a national strike on June 30 to pressure Congress to vote on a separate measure to improve pensions, subcontracted workers' rights and profit-sharing.

Southern Copper, whose Cananea copper mine in Mexico has been closed by a strike since July, fell 4 cents to $104.80 at 2:29 p.m. in New York Stock Exchange composite trading. The shares have gained 12 percent in the past year.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aQmDq4Vtxa58&refer=latin_america

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1. Hell yes.