Peru mining workers losing jobs as metals plummet

By Teresa Cespedes

LIMA, Jan 13 (Reuters) - Thousands of workers in Peru's vast mining sector have lost their jobs as global mineral prices sink and stall investments, a sign that the traditional engine of the Andean country's economy is slowing sharply.

The National Federation of Mine and Steel Workers says more than 5,500 workers have lost their jobs since December, while the Labor Ministry says at least 4,000 miners are out of work.

"There is a lot of uncertainty among mine workers right now," said Jesus del Castillo, head of the labor federation.

Peru is the world's top producer of silver, No. 2 in copper and zinc, and often ranks fifth in gold output.

The layoffs have come despite pleas by President Alan Garcia, who has asked companies to refrain from firing workers and who unveiled an economic stimulus package last month that will boost the size of the 2009 budget by 13 percent.

"The mining sector is the one that has lost the most jobs," Labor Minister Jorge Villasante told Reuters. "We've asked businesses to reduce other costs instead of eliminating jobs."

Peru's economy grew more than 9 percent last year, according to forecasts, but may slow to about 5 percent growth this year as prices for its minerals exports, the government's biggest source of revenue, plunge.

According to the union federation, the job losses, which some companies have called vacations instead of layoffs, include 800 at Newmont Mining's (NEM.N) Yanacocha gold mine and 300 at the Cerro Verde (CVE.LM) copper pit of Freeport McMoran (FCX.N).