Peru sends fuel as mining protests isolate cities
June 13, 2008 - Reuters

By Marco Aquino

LIMA, June 13 (Reuters) - Peru sent tanker ships carrying food and fuel on Friday to its southernmost province of Tacna, where thousands of people have been stranded by deepening protests over mining taxes in neighboring Moquegua province.

More than 5,000 residents of Moquegua have blocked roads, including Peru's main highway to Chile, and severed access to a mine and smelter of global mining company Southern Copper (PCU.N: Quote, Profile, Research)(SPC.LM: Quote, Profile, Research), the country's largest copper producer, police said.

Participants in the blockades say their province deserves a bigger share of taxes paid by the company, and have repeatedly rejected pleas by President Alan Garcia's chief of staff to negotiate an end to the stand-off.

The protests come as Garcia faces mounting pressure to quickly bring the benefits of an economic boom to the poor. Delays could erode support for his free-market programs and boost the prospects of a left-wing candidate in Peru's next presidential election in 2011.

"We are sending to Tacna, which sadly is isolated and lacking supplies, 9,000 gallons of gasoline and 50,000 gallons of diesel," said Jorge del Castillo, Garcia's chief of staff.

The protesters were not the only Peruvians demanding a bigger slice of an economic surge led by high prices for the silver, copper and zinc that Peru exports.

A strike at Peru's third-largest copper pit, Cerro Verde (CVE.LM: Quote, Profile, Research), went into its fourth day on Friday, and a union leader said company officials would not talk to them about a settlement. Freeport-McMoRan (FCX.N: Quote, Profile, Research), the mine's owner, has said production remains steady.

"We are going to radicalize the strike. Starting Saturday, we will block access to the mine, so that you can't enter or leave," said union leader Leoncio Amudio.

Peru's poverty rate, while falling, is nearly 40 percent and many say the economic boom has passed them by, even as mining companies reap huge profits.

Despite the strong economy, Garcia's approval rating stands at only around 35 percent and the largest federation of mining unions is threatening to shut down Peru's traditional economic engine by going on a nationwide strike on June 30 unless a bill to improve labor benefits is approved in Congress. (Additional reporting by Maria Luisa Palomino and Terry Wade; editing by Mohammad Zargham)