Workers at Freeport’s copper mine in Peru to down tools

Workers at Freeport-McMoRan's (NYSE:FCX) Cerro Verde copper mine in Peru will begin Friday a 48-hour strike to protest what they describe as the near disappearance of their profit-sharing bonus this year.

The Arizona-based company, which own a majority stake in the mine, has informed workers they are scheduled to receive an average bonus of $146 (483 soles) this year based on 2015 profits, down from about $9,090 (30,000 soles) they obtained in 2014, local newspaper La Republica reported (in Spanish).

The union said it would stop all activities for an initial period of 48 hours, which would then be extended to 72 hours and finally moved into an indefinite strike until its members demands are heard.

Key asset

While Freeport has reacted to low copper prices by making several cutbacks at existing operations, the miner has gone ahead with a $4.6 billion expansion of its Cerro Verde open pit mine, which has been in production since the mid-1800s.

The project, which should be close to completion, would triple capacity at the concentrator plant to 360,000 tonnes per day and it is set to catapult Cerro Verde to the top three global copper operations by 2017.

About $22 billion worth of projects have been cancelled or delayed in Peru in recent years due mainly to anti-mining protests.

The copper and molybdenum mine produced 41,873 tonnes of copper in February, up 180% when compared to output during the same month the previous year, according to official data published this week (in Spanish).

Mining investments in Peru, which drove economic growth during the past decade, has fallen dramatically in the past two years as violence linked to relentless anti-mining sentiment keeps scaring investors away.

It is estimated that about $22 billion worth of mining projects have been cancelled or delayed in the South American nation in recent years as a result of social conflicts and red tape.

Peru is the world’s No 3 copper producer and mining accounts for about 60% of its export earnings.