Peru's government was brokering wage talks on Friday to end another labor strike at Freeport-McMoRan's giant Cerro Verde mine, which churns outs 2 percent of the global copper supply.
The mediation effort will test the ability of leftist President Ollanta Humala, who took office in July, to resolve labor and environmental conflicts that constantly arise in the Andean country, where mineral exports traditionally drive economic growth and communities want a slice of surging corporate profits.
The strike entered its second day on Friday and the government, in what appeared to be a bid to pressure the company to reach a deal to raise pay for workers, has declared the strike legal -- a move that means the company cannot hire temporary workers to replace union members on the picket line.
It was the first time a Peruvian government has declared a strike legal in Cerro Verde's 40-year history and the company has appealed to overturn the ruling. The ruling was made after workers had downed tools for five days earlier this month after a two-day protest.
One round of mediation had started on Friday and a second round was scheduled for later in the day. Meanwhile, the labor ministry could announce its second ruling on whether the strike is legal on Friday or later, officials said.
Freeport also faces an ongoing strike at its giant Grasberg mine in Indonesia. Its shares were trying to recover on Friday after falling 2.9 percent on Thursday to $31.34 amid strikes and worries about the global economy.
Union leaders say they will paralyze output at Cerro Verde, but Freeport spokesman Eric Kinneberg said production had not been materially affected by the strike and the facility was operating with supervisory and personnel that volunteered to work under strike conditions.
U.S.-based Freeport controls Cerro Verde, which produced 312,336 tonnes of copper in 2010. Peruvian precious metals miner Buenaventura also has a stake.
Copper traders said the Cerro Verde walkout had little impact on global prices for the red metal on Thursday, as economic concerns overshadowed the strike.
Cerro Verde's labor contract expired Aug. 31 and its 1,100 workers had put down tools for five days earlier this month to press the company to sign a new contract. They returned to work when the government declared the strike illegal.
Mine workers throughout the developing world have walked off the job this year to demand a greater share of mining profits at a time when metals are fetching high prices on international markets.