Kazakh copper miner offers wage rise to end strike

ALMATY (Reuters) - Kazakh copper miner Kazakhmys agreed on Sunday to raise wages if about 300 workers call off an underground protest that has unnerved authorities in the Central Asian state following deadly riots in an oil town.

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

Around 80 miners failed to emerge after their Friday shift at the Annensky underground mine came to an end. They were later joined by more than 200 workers from two nearby mines owned by Kazakhmys, a source at the company said, requesting anonymity.

"Kazakhmys management has expressed its willingness to meet the key requirements put forth by workers in a collective letter, including the issue of raising wages," the company, which is in the FTSE 100 index <.FTSE>, said in a statement.

In return for meeting these demands, the company said miners should return to the surface by 2200 local time (1600 GMT) and that people gathered near the mine's administrative headquarters should disperse.

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 involving 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 ammunition 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 after going on strike in May. The oil company had said the strikes were illegal.

Kazakhmys has so far adopted a more conciliatory stance with the miners at Annensky, one of six underground mines near the central Kazakh city of Zhezkazgan that fall under its control.

Three senior managers, including Chief Executive Oleg Novachuk, held talks with representatives of the striking miners and sent a letter to local prosecutors and officials requesting the sit-in be treated as a labor dispute, Kazakhmys said.

"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," Kazakhmys said in an earlier statement.

The six underground mines and a single open-pit operation around Zhezkazgan contribute about 70 percent of the company's mined ore. Mining at Annensky has been halted as a result of the dispute.

The company source, speaking by telephone, told Reuters that workers from the Yuzhny and Vostochny mines had descended into the Annensky mine in solidarity after their own shifts ended. Production at Yuzhny and Vostochny was not affected, he said.

"The situation on the territory of the mine is generally calm," the source said. Security had earlier been tightened around the mine's explosives warehouse.

Kazakhmys said it had increased pay 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.

(editing by David Stamp)

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