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10 July, 2006
The Peruvian government has stipulated a wage and bonus, thus ending a strike by a union of FNTMMSP, ICEM’s mining and metals affiliate in Peru. The nine-day shut down of the country’s only iron ore operation forced the government to impose terms on Shougang Hierro Peru SA, which is wholly-owned by the Chinese government through its Shoulda Iron and Steel Group.
The government ordered a pay increase of more than half of what the union was seeking, and also imposed a one-time bonus. Shoungang’s 800 miners had earned about US$13-per-day, while the average mining wage in Peru is $33-per-day. The imposed settlement for this year amounts to an 8% salary increase, and a bonus payment that exceeds US$300.
The Chinese state-run company argued during talks that free water and electricity provided to iron ore miners offset the difference in pay schemes with other mining companies operating in Peru. Under Peru’s labour law, the regional labour agency can intervene once a work stoppage has been declared legal. The strike lasted from 19-28 June.