By Maria Luisa Palomino and Marco Aquino
LIMA (Reuters) - Peruvian protesters freed 48 policeofficers from captivity on Tuesday but the government was stillstruggling to end a week-long blockade over mining taxes asworkers went on a strike at a second copper mine.
Residents of Moquegua province have occupied roads,including the main highway to Chile, and severed access to theIlo smelter and Cuajone mine of Southern Copper Corp, Peru'stop copper producer, to demand that their province receive abigger share of taxes paid by the company.
"All police who were illegally taken hostage have beenfreed," said Jorge del Castillo, President Alan Garcia's chiefof staff. He urged protesters to negotiate a deal to divvy upmining taxes and call off roadblocks that have caused food andfuel shortages.
Hours before protesters were persuaded to release thehostages, union workers at the Cuajone mine started a two-daystrike for better benefits, the latest sign that Garcia isbeing pressured to spread the wealth from a six-year economicboom to labourers and the poor.
Police officers, although armed with tear gas, wereoverpowered by thousands of club-wielding protesters on Mondaywhen they tried to break a blockade at a bridge.
The police, some wearing bloody bandages, were then herdedinto a church and surrounded by demonstrators. Twelve of the 60officers were let go earlier on Tuesday to be taken to ahospital, and soon the remaining hostages were freed.
"We have taken a step forward in good faith so that thepolice don't have to stay in the church," said Roman CatholicBishop Marco Antonio Cortez, who helped broker the agreement.
The protests started with 5,000 people and have grown toinclude 20,000 at times as Garcia, whose approval rating hoversat 35 percent, faces calls to reduce poverty quickly.
Delays could erode support for his free-market programs ata time when left-wing parties are eyeing Peru's nextpresidential election in 2011. The poverty rate, while falling,remains near 40 percent.
PROVINCE CUT OFF
The blockade has cut road links to Tacna, Peru'ssouthernmost province, and the government has been forced tosend tanker ships with gasoline to replenish supplies.
Moquegua, more than 700 miles south of the capital, blamesthe central government for allowing Tacna to get a greatershare of taxes generated by Southern Copper.
Residents in provinces like Moquegua say Peru's economicsurge has passed them by, even as mining companies reap bigprofits.
The strike at Southern Copper comes as Peru's third-largestcopper pit, Cerro Verde, was in its eighth day of a labourwalkout, union leader Leoncio Amudio said.
The mine's owner, U.S.-based Freeport-McMoRan, has saidproduction remains steady and that the government has declaredthe walkout illegal, meaning labourers could eventually losetheir jobs if they fail to return to work in coming days.
Peru is a leading global exporter of minerals and AlbertoAdrianzen, a political analyst, said other regions could alsoprotest perceived unfair distribution of mining tax revenues.
"This could spread to other provinces," he said. "Thegovernment needs to overhaul the way it shares mining revenuewith the provinces."
(Writing by Terry Wade; Editing by Eric Walsh and BillTrott)
