Kazakh copper miners strike underground to demand more pay

(Reuters) – Around 300 Kazakh copper miners continued their underground strike on Sunday, demanding higher wages from their employer Kazakhmys (KAZ.L) in a labor dispute likely to unnerve authorities in the Central Asian state just months after deadly oil town riots.

London-listed Kazakhmys, the world’s 11th-largest copper producer, sent senior managers to the Annensky mine in central Kazakhstan and said it would not punish striking workers if they agreed to enter constructive talks.

“The Kazakhmys representatives guaranteed that no sanctions would be taken against workers in the event that they adopt a constructive approach to the labor dispute,” the company, which is in the FTSE 100 index .FTSE, said in a statement.

Authorities in Kazakhstan, a former Soviet republic of 16.7 million people, are especially wary of labor unrest in single-industry towns after a months-long dispute by sacked oil workers last year erupted into the country’s worst violence in decades.

At least 14 people were killed in clashes in December when police used live rounds against protesters in the remote oil town of Zhanaozen. The unrest posed the most serious challenge to President Nursultan Nazarbayev in his more than 20-year rule.

That violence was preceded by months of protests by nearly 2,000 oil workers sacked by KazMunaiGas Exploration Production RDGZ.KZ (KMGq.L) after going on strike in May. The oil company had said the strikes were illegal.

After talks with representatives of the striking miners, Eduard Ogai, chief executive of Kazakhmys Copper, read a letter to local prosecutors and officials in which management requested the sit-in be treated as a labor dispute, Kazakhmys said.

Ogai was joined at the mine by Oleg Novachuk, chief executive of Kazakhmys group, as well as chief operating officer Sergei Dyachenko, it said.

The miners failed to emerge from the Annensky mine, near the town of Satpayev in central Kazakhstan, after their Friday shift came to an end. Kazakhmys had tightened security around the mine’s explosives warehouses, a company source said on Saturday.

“The situation on the territory of the mine is generally calm,” the company said on Sunday. “According to the latest information, around 300 people remain in the underground part of the mine.”

Annensky is one of six underground mines operated by Kazakhmys near the city of Zhezkazgan, a region that contributes about 70 percent of the company’s mined ore. It also operates one open-pit mine nearby.

Kazakhmys said it had increased salaries across the entire group, including miners’ salaries, by an average of 20 percent in 2010. Since February 2011, it had offered performance-related bonuses of up to 15 percent, it said.

The average monthly salary for Kazakhmys miners was around 240,000 tenge ($1,622), nearly three times the national average, the company source said.

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