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26 June, 2006
In Peru, 800 iron ore miners, members of Sindicato de Obreros Mineros, an affiliate of Federación Nacional de Trabajadores Mineros, Metalurgicos y Siderurgicos del Peru (FNTMMSP) began a strike 19 June against Chinese state-run Shouda Iron and Steel Group (Shougang).
The strike at Peru’s only iron ore mine at Marcona, 350 kilometres south of Lima, was caused when managers of Shougang Hierro Peru failed to meet wage demands of miners, who are among the lowest paid in the country’s mining industry.
The mine union, connected with ICEM affiliate FNTMMSP, is seeking wage increases equivalent of US$1.69-a-day, while Shougang offered only the equivalent of US$0.42-a-day. Shougang’s miners earn a salary of only US$13-a-day, far below the average Peruvian mining salary of US$33-a-day, according to Peru’s National Society of Mining, Petroleum and Energy.
Union members at the mine last week blocked the entrance, preventing the company from using contract work to continue the work. Meanwhile, Peru’s government has declared the strike a legal one, meaning the company must continue negotiating with the union and the Labour Ministry can impose an increase to workers’ salaries if work is to be re-started.
Shougang declared force majeure on all iron ore exported from Peru, the majority of which is destined for Japan and China. The Chinese state company bought the mine in 1992 from a state-run Peruvian company for US$118 million, and has increased production since 2002 by an average of 20% per annum.
The increased production has caused numerous safety concerns, which have not been addressed, and Peru’s Energy and Mines Ministry says the company has not met investment commitments tied to the sale.