Peru Miners Strike for Higher Salaries

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Demanding higher wages and more benefits, 30,000 miners in Peru held strikes at  several mines this week, with involvement from more than half of Peru’s 67 mining unions. The world’s leading silver producer, Peru also exports copper, gold and zinc, which has led to a high economic growth for this country. But workers still haven’t felt economic growth in their own pockets, and declared that companies should announce higher profit shares and better pensions before the strike ends.

In the past year alone, there have been numerous strikes at mines throughout Latin America. This marks the third national strike over the past 14 months in Peru. The national strikes in May and November led to $400 million in losses for at least one company, Codelco. Because of lost output and disruptions, these strikes receive some public blame for rising metals prices. However, dissatisfaction with the mining industry is nothing new in these areas. In 2006, it was proclaimed that there was a “mining crisis” in Peru, as violent protests against foreign investors were prevalent.

“Some people advocate raising taxes on the mining companies, while others have promoted voluntary cash donations on the part of foreign investors to placate the protesters,” Enrique Ghersi wrote that year. “But the social crisis that affects mining in Peru will not be resolved with taxes or alms, because it is the consequence not of the lack of state intervention but of its excess.”

This week, Peruvian government  officials stated their belief that congress, not companies, should solve the problem. Since 2006, the government has considered allowing higher profit shares and pensions for miners, but little action has been taken. Current strikes affect several companies in the metals arena, including Southern Copper Corp., precious metals miner Compania de Minas Buenaventura SAA and the Peruvian unit of Chinese steelmaker Shougang.

–Amy Edwards

Comments (2)

  1. Jay says:

    This is another case of state interventionism in private affairs. If workers are not being properly compensated, they can always extend the strike or simply walk out. The more a government interferes with private actions, the more dependant its people become of a father-state. When it comes to market conditions (i.e. workers’ salaries or benefits), it is best to let the market rule out those who don’t provide up-to-par opportunities, in benefit of companies who actually do. In this case, we’d never know how willing to negotiate the mining companies would be (and the fact that they need qualified workers lead me to believe they would likely be quite accommodating) if the state intevenes and interferes.

  2. admin says:

    Great comments! The populism and resultant government intervention of many Latin American countries has proven itself time and time again to be completely ineffective. I suspect Venezuela’s intervention in the ownership and operation of Ternium Sidor will result in complete disaster. It always does! LAR

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