Strike ends at Latin America's biggest gold mine

LIMA, Peru, Apr 18 (Reuters) Workers at Latin America's biggest gold mine, Yanacocha, has ended a brief strike over a demand for better benefits at a site that has been a flash point of anti-mining anger by Peruvian environmentalists and poor farmers.

Workers had walked off the job starting on Saturday, calling for improved health, education and housing benefits at the mine, which is controlled by Denver-based Newmont Mining Corp. and Peru's Buenaventura.

''As a result of dialogue, the union agreed to unconditionally and definitively lift this measure, promising to return to their jobs during normal working hours starting on Tuesday, April 18,'' Yanacocha said in a statement.

The work stoppage was the latest to hit Peru's mining industry -- one of Latin America's most dynamic. In recent years, farmers have protested against planned projects over worries about their environmental impact, and workers have carried out strikes demanding better pay as international mineral prices have climbed.

Peru's Labor Ministry called the Yanacocha strike illegitimate because the union did not gather enough workers' signatures to back the protest, a ministry spokesman said.

A source at the company said just 100 of some 660 unionized laborers had abandoned their posts, while a union official said that 1,000 workers were striking and production was halted.

The company, in a statement, said: ''Our operations continued despite these actions and thanks to the commitment and effort of our workers, the majority of whom opted to continue working.'' Yanacocha added that workers recognized the validity of a previous benefits accord with the company, which expires in February 2007.

The strike by miners at Yanacocha came on a day when gold prices hit a 25-year high at 5.80 an ounce.

Yanacocha produced around 3.3 million ounces of gold last year.

Output at the mine yields nearly half of the gold in Peru, the world's fifth-largest producer.

Yanacocha officials said they forecast the mine could produce 2.6 million ounces this year and 2.5 million ounces in 2007.

Mining forms part of Peru's economic backbone, responsible for more than half of its hard currency earnings.

But in the Peruvian interior, where many mines are located, Andean communities are highly wary of mining, and protests against companies have forced some projects to be abandoned as farmers fear the destruction of their land and see little benefit from companies making big profits.

Activists say communities near mines lack sufficient drinking water and sanitation, while schools and hospitals are often in crumbling disrepair following years of government neglect.

Tapping public anger over mining, former army commander Ollanta Humala finished first in Peru's presidential election last week, vowing to levy a windfall tax on companies that earn ''excessive'' profits. The vote is headed to a runoff since no candidate won more than 50 percent of the balloting.

REUTERS PDS PM0629