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A series of strikes in Peru's mining sector are linked to demands by workers who want more cash, in some cases claiming that mining companies are under-reporting their profits.

The National Federation of Mining, the group representing unionized miners in Peru, charges that some companies have under-reported profits from last year, leading to a smaller payout for workers.

Company officials, however, deny there has been any hiding of profits.

Peruvian mine workers are entitled to an 8% share of company profits as reported to Peru's tax agency Sunat. An economist for the National Federation of Mining said profit-sharing for workers at major mining companies could be worth an entire year's wages, and two to three months at medium-sized companies.

Strikes are under way at an iron mine owned by Shougang Hierro Peru SAA (SHPC1.VL), a gold mine owned by Compania de Minas Buenaventura SAA (BVN), and a copper mine owned by Doe Run Peru.

Workers at copper producer Sociedad Minera Cerro Verde (CVERDEC1.VL), majority controlled by Freeport McMoRan Copper and Gold (FCX), are expected to go on strike Wednesday.

"The main point is that workers want a bigger share of profits," said Gustavo Urrutia, a mining analyst with brokerage Inteligo SAB.

He said profit-sharing was weak in 2008 as lower metal prices limited company earnings. That set the stage for complaints this year by workers who expected the rebound in metals prices would lead to greater profit-sharing for 2009.

Hans Flury, head of Peru's National Mining, Energy and Petroleum Society, told the newspaper Gestion Tuesday that he didn't know of any particular cases of under-reporting of profits.

"I don't know the specifics, but I doubt very much that formal companies could have conducted a fraud of this nature," Flury said in comments confirmed by a spokesman for Southern Copper Corp. (SCCO), where Flury is a director.

A spokesman for Sunat said the agency couldn't comment on any ongoing investigations for legal reasons, but that part of its remit was to continually check for tax reporting irregularities. To date, no company in Peru's mining sector has been found to have under-reported profits, the spokesman added.

Cerro Verde said Tuesday in a report to Peru's securities regulator it had complied with required distribution of profits to workers in line with a collective agreement signed by workers.

Buenaventura has also denied any irregularities in profit sharing, or in its earnings report to Sunat. No one at Shougang was immediately available for comment.

Peru is the world's largest producer of silver, its second largest copper producer, and sixth largest gold producer. It also produces large amounts of other minerals, such as zinc, tin and molybdenum.

-By Sophie Kevany, Dow Jones Newswires; 51-198-903-8043; sophie.kevany@dowjones.com

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