Thousands of protesters overwhelmed Peruvian riot police on Monday, forcing them to halt efforts to clear a week-long blockade in a mining region that has left cities short of food or fuel.
Residents of Moquegua have seized roads, including Peru's main highway to Chile, and cut off access to a mine and smelter belonging to Southern Copper, the country's largest copper producer, to demand their province receive a bigger share of taxes paid by the company.
Police fired tear gas to disperse the crowds, but were pushed back by protesters demanding a bigger share of an economic boom that has generated windfall profits for mining companies. The protests started with 5,000 people and have grown to 20,000, police said.
The situation here in Moquegua is out of control and the police must retreat. I have seven injured and am in trouble, Alberto Jordan, a regional police chief, told RPP radio.
President Alan Garcia's chief of staff, Jorge del Castillo, reiterated pleas to local political leaders to negotiate an end to the stand-off and blamed left-wing political groups for rejecting a settlement.
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 at a time when left-wing parties are eyeing Peru's next presidential election in 2011.
The police are telling citizens to leave and we are asking extremists to take a back seat, because they don't want a solution, they want death and injury to create a spectacle, Del Castillo said.
The protests have severed road links to cities in the neighboring province of Tacna, Peru's southernmost province, and on Friday the government was forced to dispatch tanker ships carrying food and gasoline to relieve shortages.
Peru's poverty rate, while falling, is nearly 40 percent. Residents in provinces like Moquegua say the economic surge has passed them by, even as mining companies reap huge profits.
Moquegua blames the central government for allowing Tacna to get a disproportionate share of tax revenue generated by Southern Copper.
Oscar Gonzalez, Southern Copper's chief executive, said the government should split revenue fairly between the provinces and that the company's Ilo smelter, which is running out of supplies, could be paralyzed within a week.
If the government doesn't declare a state of emergency, there will be more problems, Gonzalez told Reuters. It's something that is out of the government's hands. (Additional reporting by Maria Luisa Palomino, editing by Alan Elsner)