Tues

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04

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7Currency Market

Precious Metals

Base Metals

Energy Market

News & Report Analysisq WTO panel to resolve steel

dispute with India, Japan

q Steel firms hit record sales, meet production targets

q NMDC iron ore production up 20% at 34 mt

q Vedanta's bauxite mine expansion gets mixed response

q GST may take sheen off jewellery sector: Ind-Ra

q Mitsubishi Materials sees first-half copper output up 13 pct y/y

Daily2Tuesday 04, April 2017

London Metal Exchange : Monday 03, April 2017 MMR Landed Prices

Pr. Sell Morning Session Afternoon Session Kerb Change Stk(tns) Value

(1) Buy Sell * (2) Buy Sell (2) - (1) change$/ton Rs/ton

Copper Grade ASpot 5849.00 5816.50 5817.00 5747.00 5748.00 5728.00 -32.0 283,900 MMR LP 408,9133-mth 5865.50 5845.00 5847.00 5769.00 5770.00 5753.00 -18.5 -7275 14-D MA 408,424Average 10-days - 5787.20 20-days - 5795.60 30-days - 5848.60 PP (HCL) 436,508Tin High GradeSpot 20100.00 20220.00 20225.00 20125.00 20130.00 20084.00 125.0 2,510 -- --3-mth 20000.00 2125.00 20130.00 20070.00 20075.00 20050.00 130.0 -955 -- --Average 10-days - 20147.50 20-days - 19950.30 30-days - 19760.70 -- --LeadSpot 2310.00 2286.00 2287.00 2271.00 2272.00 2276.00 -23.0 184,275 MMR LP 165,9753-mth 2319.00 2305.00 2307.00 2281.00 2282.00 2286.00 -12.0 -2900 14-D MA 168,681Average 10-days - 2377 20-days - 2311.70 30-days - 2295.60 PP (HZL) 177,800Zinc Special High GradeSpot 2782.50 2744.00 2746.00 2710.00 2711.00 2681.00 -36.5 370,950 MMR LP 202,2783-mth 2802.00 2767.00 2767.50 2733.00 2734.00 2708.00 -34.5 -925 14-D MA 206,707Average 10-days - 2799 20-days - 2774.20 30-days - 2792 PP (HZL) 210,000AluminiumSpot 1946.50 1948.00 1948.50 1845.00 1946.00 1940.00 2.0 1,877,300 MMR LP 144,4613-mth 1954.50 1958.00 1959.00 1956.00 1957.00 1952.00 4.5 -9100 14-D MA 143,552Average 10-days - 1927.40 20-days - 1902.20 30-days - 1899.90 PP (Nalco) 148,200Aluminium AlloySpot 1695.00 1690.00 1700.00 NA NA NA 5.0 14,320 3-mth 1705.00 1700.00 1710.00 NA NA NA 5.0 -400Average 10-days - 1697.50 20-days - 1702.50 30-days - 1686.70 Nickel Copper 01-MarSpot 9875.00 9960.00 9965.00 9805.00 9810.00 9785.00 90.0 376,476 Aluminium 09-Mar3-mth 9955.00 10010.00 10030.00 9870.00 9875.00 9850.00 75.0 -1038 Zinc 04-AprAverage 10-days - 9903 20-days - 10079 30-days - 10336.30 Lead 04-AprNote: 1. MMR LP = MMR Landed Prices, excluding excise duty. 2. PP = Producer Prices ex-smelter, excl. excise

Indicative Domestic Market Rates (Rs./kg) Comex Copper (cents/lb) Comex Al (cents/lb)Mumbai Delhi Chennai Rate Change Rate Change

03-Apr Prev 03-Apr Prev 03-Apr Prev Apr'17 259.75 -2.5 - -Virgin Metals - - May'17 260.35 -2.5 - -Copper Pat -- -- 382.0 380.0 - - Jun'17 261.20 -2.5 - -Copper W/Bar 430.0 429.0 - - - - Precious Metals : Indicative RatesAlum Ingot 145.0 144.0 154.0 154.0 145.0 145.0 Metal Market Unit 03-Apr PrevZinc Slab 227.0 229.0 227.0 227.0 - - Gold Std Mumbai Rs/10g 28,735 28,745 Lead Ingot 155.0 154.0 153.0 153.0 - - Silver Mumbai Rs/kg 42,590 42,510 Tin Slab 1,480.0 1,490.0 1,475.0 1,491.0 - - Gold London $/tr.oz. 1,247.25 1,248.80Nickel (4x4) 740.0 740.0 730.0 730.0 - - Silver London $/tr.oz. 18.16 18.10Scrap - - Gold Comex $/tr.oz. 1,250.80 1,245.00

Copper Heavy 395.0 395.0 -- -- - - Silver Comex $/tr.oz. 18.19 18.18Copper Uten. 366.0 362.0 -- -- - - Forex: Apr. 03, 2017 (Rs/Unit Currency)Copper Mixed -- -- 363.0 360.0 - - USD GBP YEN Brass Utensil 315.0 315.0 -- -- - - Buy 65.08 81.34 0.5842 Brass Huny 313.0 313.0 -- -- - - Sell 64.99 81.27 --- 0.5832 Brass Sheet 320.0 321.0 - - - - EURO SGD AUD SFR Alum Utensil 118.0 118.0 127.0 127.0 - - Buy 69.32 46.57 49.47 64.88

Sell 69.23 46.49 49.41 64.77

Customs Notified Rates : March 03rd, 2017 [Rs.(Imp/Exp)]: US$ 67.65/66.00;Pound Sterling 83.40/80.65;Euro 71.55/69.10

Alum. Alloy : Basic prices excl. CST/VAT

Mumbai Mkt rates in kgs : 28/02/2017ADC 12

129AlSi 9 Cu3

132.5LM6

144

Ex. Delhi Mkt rates in kgs : 28/02/2017 128 - -

Week ended Avg of Steel Prices : 31/03/2017 (Incl. Excise duty)Mandi Gobindgarh - Punjab Mumbai Kolkata Delhi Chennai Mumbai Kanpur Durgapur

Sponge Iron 22,000 HMS OLD 20,500 HMS 27,900 25,400 25,600 24,200 MS Ingots 24,500 25,500 25,500 Pig Iron 33,500 HMS Fresh 27,600 CRP(LSLP) 28,500 - - 27,300

Minor Metals ($/LB)Antimony Cadmium Cobalt HG Moly.oxide Selenium Silicon Ferro-vana Tungsten

99.65% 99.95% 99.80%

8,900 77.00 27.10 8.95 17.95 2000.00 24.90 216

Daily3Tuesday 04, April 2017

Most of Asian stock market opened with lower level on Tuesday as a precaution ahead of a potentially tense meeting between US President Donald Trump and his Chinese counterpart Xi Jinping later this week. US stocks market ended lower yesterday after the announcement of second quarter disappointing vehicle sales data and lackluster economic data also enhanced the concerns that lofty equity valutations won’t be propped by commensurately stronger corporate quarterly results in coming weeks. The Dow Jones Industrial average also fallen more than 100 points earlier, finished down 13.01 points or less than 0.1 per cent to close at 20,650.21on Monday. Similarly, S&P 500 Index fell 5.01 points or 0.2% to close at 2,357.71. Global investors cautious ahead of a meeting this week between US President Donald Trump and Chinese President Xi Jinping in Florida expected to be contentious on trade.

Currency MarketUS dollar currency also opened at lower

level on Tuesday after investors sold stocks on Monday. The dollar currency trembled against the yen on Tuesday, buckling against its safe-haven Japanese peer as a risk-averse mood spread through the broader markets. Investor appetite for risk has been dulled this week by a number of factors, including an anxious wait for an upcoming meeting between U.S.

President Donald trump and Chinese President Xi Jinping and a suspected suicide bombing in St. Petersburg, Russia. The dollar index, which tracks the greenback against a basket of six trade-weighted peers, fell almost 0.1 percent to 100.48, although it touched a 2-1/2-week high in the previous session.

Yesterday’s positive announcement of US construction spending and manufacturing data affirmed a steady improvement in the economy, but did little to uphold Treasury yields and the dollar. The euro was steady at $1.0667 after rising only about 0.2 per cent overnight against the dollar, its advance tempered by a sharp decline in German bund yields driven by flight-to-safety following the bombings in St. Petersburg. Immediate focus in Asia was on the Reserve Bank of Australia's policy decision due

6 mthLIBOR

MajorCurrencies

Today’sCrosses

Spot Cash Forward Rates v/s INR (Export/ Import)

v/s INR April May June September December March

1.42 USD / INR 65.02/ 03 65.21/ 24 65.51/ 54 65.77/ 80 66.55/ 58 67.31/ 35 68.05/ 08

- ATM Options (put/call) - - 0.32/0.33 0.52/0.53 0.67/0.68 1.04/1.06 1.30/1.34 1.53/1.60

0.15 EUR / USD 1.0667 69.36/ 37 69.64/ 67 70.05/ 08 70.44/ 47 71.63/ 65 72.84/ 87 73.99/ 01

0.04 USD / JPY(100) 110.56 58.81/ 82 59.04/ 06 59.36/ 40 59.69/ 72 60.66/ 69 61.67/ 71 62.64/ 68

0.49 GBP / USD 1.2488 81.20/ 22 81.49/ 53 81.91/ 96 82.31/ 35 83.50/ 54 84.71/ 76 85.87/ 90

-0.66 USD / CHF 1.0015 64.92/ 93 65.21/ 23 65.62/ 64 66.00/ 03 67.20/ 22 68.44/ 46 69.61/ 62

3.06 AUD / USD 0.7602 49.43/ 44 49.55/ 57 49.75/ 77 49.92/ 94 50.45/ 46 50.96/ 98 51.47/ 48Source : Mecklai Financial

USD/INR - 03/04/17

USD/INR Overnight VAR 0.3025

Data releases today Forecast Previous

USD Trade Balance -46.0B 48.5B

USD Factory Orders m/m 1.0% 1.2%

64.78

64.82

64.86

64.90

64.94

64.98

65.02

65.06

9:00

10:0

0

11:0

0

12:0

0

13:0

0

14:0

0

15:0

0

16:0

0

17:0

0

Source : Mecklai Financial

Daily4Tuesday 04, April 2017

later in the day. The euro was steady at $1.0667. AUD/USD traded down 0.34% to 0.7580, while USD/JPY changed hands at 110.43, down 0.42%.

The Indian rupee currency erased all the morning gains on Monday and ended with weaker note against the US dollar tracking losses in Asian currencies market. The rupee closed at 65.03, down 0.25% from its Friday’s close of 64.85. The rupee opened at 64.79 a dollar and touched a high of 64.76, a level last seen on 19 October 2015.

Precious MetalGold prices hit one-week highs on Tuesday,

buoyed by a weaker dollar and as investors

turned to safe-haven assets on worries over

geopolitical tensions. Spot gold had risen 0.3 %

to $1,255.96 per ounce by 0058 GMT, while US

gold futures were up 0.4 percent at $1,258.40.

Investor appetite for risk has been dulled this

week by a number of factors, such as caution

ahead of the upcoming meeting between U.S.

President Donald trump and Chinese President

Xi Jinping and a suspected suicide bombing in

St. Petersburg, Russia. Holdings of SPDR Gold

Trust, the world's largest gold-backed exchange-

traded fund, climbed 0.53 percent to 836.77

tonnes on Monday from 832.32 tonnes on Friday.

While precious metal trading at MCX also

followed the global cues. MCX GOLD Apr17

contract was up by 0.28% to Rs.8543 per 10

gram. GOLD Jun17 contract was up by 0.07%

to Rs.28763 per10 gram. MCX GOLDM Apr17

contract was up by 0.07% to Rs.28633 per 10

gram. MCX GOLDM May17 contract was up by

0.07% to Rs.28,735 per 10 gram. GOLDGUINEA

Apr17 contract was up by 0.15% to Rs.23,368

per 8 gram. GOLDPETAL Apr17 contract was up

by 0.03% to Rs.2900 per gram.

MCX May17 contract was down by 0.26%

to Rs.42,215 per kg. SILVER Jul17 contract was

down by 0.27% to Rs.42,642per kg. Among other

precious metals, Spot silver rose 0.2% to $18.27.

Platinum rose 0.5% to $956.10. It earlier touched

a one-week high of $960.40. Palladium fell

0.2% to $800.55. MCX SILVERM Apr17 contract

was down by 0.25% to Rs. 42,234 per kg. MCX

SILVERM Jun17 contract was down by 0.22% to

Rs. 42665 per kg. MCX SILVERMIC Apr17 contract

was down by 0.24% to Rs.42,236 per kg.

Base MetalThe benchmark industrial metal, copper

trading at London Metal Exchange was trading flat at $5,752 a tonne by 0206 GMT, after 1.5% losses the previous session. Prices earlier slipped to their lowest since March 27 at $5,747.50, having on Monday broken below their 100-day moving average at $5,785. The Shanghai Futures Exchange was closed for a public holiday. Copper prices rebounded substantially in the last five months, surging from $2.1/lb to $2.64/lb, indicating a growth of 14% in the final quarter of the last year and a 5.6% increase in the first quarter this year. The recent rally in copper prices was driven by a strong growth in demand from emerging markets, including China, India and South-East Asian countries.

While base metal prices ended upward at MCX on Monday. MCX COPPER Apr17 contract was up by 0.03% to Rs. 380.85 per kg. COPPERM

Daily5Tuesday 04, April 2017

Apr17 contract was up by 0.07% to Rs. 380.90 per kg. NICKEL Apr17 contract was up by 0.40% to Rs. 653.60 per kg. NICKELM Apr17 contract was up by 0.43% to Rs. 653.70 per kg. ALUMINIUM Apr17 contract was up by 0.43% to Rs. 127.35 per kg. ALUMINI Apr17 contract was up by 0.39% to Rs. 127.30 per kg. LEAD Apr17 contract was down by 0.46% to Rs. 150.30 per kg. LEADMINI Apr17 contract was down by 0.43% to Rs. 150.3 per kg. ZINC Apr17 contract was up by 0.25% to Rs. 179.3 per kg. ZINCMINI Apr17 contract was up by 0.28% to Rs. 179.35 per kg.

Energy MarketGlobal crude oil prices held early gains on

Tuesday in Asia with figures on U.S. inventories later part of the day expected to set the market tone in thin regional trade with markets in China, Hong Kong, Taiwan and India shut for holidays. On the New York Mercantile Exchange crude futures for May delivery rose 0.08% to $50.328 a barrel, while on London's Intercontinental Exchange, Brent edged up 0.06% to $53.15 a barrel. Yesterday, crude oil prices settled lower on Monday, as investors fret over rising U.S. shale production while a rebound in Libyan oil output weighed on sentiment. Overnight, crude settled lower on Monday, as investors fret over rising U.S. shale production while a rebound in Libyan oil output weighed on sentiment.

The American Petroleum Institute (API) will release its estimates of crude stocks at the end of last week late on Tuesday. The figures will be followed by official data from the U.S. Energy Information Administration (EIA) on Wednesday. Analysts expect crude inventories dropped by 530,000 barrels at the end of last week, with distillates down by 1.12 million barrels and gasoline supplies showing a 1.462 million barrels decline.

Meanwhile, the reopening of Libya’s biggest

oil field – the Sharara – on Sunday, heaped further pressure on oil prices. Over the past week, Armed factions had blocked output at Libyan oil fields, reducing output by 252,000 barrels per day (bpd), a source at the National Oil Corporation (NOC) said last week.

Overall, global investors remained hopeful that OPEC and non-OPEC members would extend the current deal to cut production beyond June, after comments from several ministers from oil producing nations supported the idea of an extension.

News & Report AnalysisWTO panel to resolve steel dispute with India, Japan

The WTOs dispute settlement set up a panel to resolve the dispute between Japan and India over imposition of safeguard import duty on iron and steel products. As both the sides failed to resolve the issue in the bilateral consultation process, Japan had sought formation of dispute resolution panel.

"The dispute settlement body of the WTO has agreed to establish the panel," an official said. Japan in December dragged India to the WTO against certain measures taken by New Delhi on imports of iron and steel products.

Japan, which is the second largest steel producer in the world, had alleged that duties imposed on steel imports by India violates WTO trade norms.

During September 2015, India imposed provisional safeguard duty of 20 per cent on import of certain categories of steel with a view to protect domestic producers. Later in November last year, the government slapped the final duty. The dispute assumes significance as India and Japan implemented a comprehensive free trade

Daily6Tuesday 04, April 2017

were 21 % higher than in the same month a year ago. SAIL posted 12 % growth in production in 2016-17 and its exports tripled during the year.

JSW Steel met its target for 2016-17 with a crude steel output of 15.80 million tonnes, up 26 per cent from a year ago. The company's flat steel production was up 23 %, year on year, to 11.41 million tonnes and long products grew 18 % to 3.21 million tonnes. Flat steel is used in automobiles and long steel in construction and infrastructure. The steel industry is seeing a demand pick-up in construction, automobiles and white goods, sectors that were hit by demonetisation. Over the last few months producers had to export steel to maintain capacity utilisation, which has climbed to an average 85 % from 75 % earlier in the year.

Steel exports jumped 78 %, year on year, in April-February to 6.62 mt and imports declined 40 % to 6.59 mt. Steel production for sale increased 11 % to 92 mt and consumption was 76.22 mt, up 3.4 % from 2015-16. India was as a net exporter of finished steel in April-February.

NMDC iron ore production up 20% at 34 mt

The sale and production of iron ore by NMDC Limited has gone up by 23 per cent and 20 per cent respectively in the year ending March 31, 2017. However, a similar growth in profitability is unlikely as the iron ore prices started firming only towards the second half of the financial year, according to the company sources.

The company has achieved a total production of 34.07 million tonnes of iron ore in 2016-17 as compared to 28.57 million tonnes in the previous year while the sales volumes stood at 35.62 million tonnes as compared to 28.83 million tonnes in 2015-16, according to the company data.

"Though sales have increased by close to 7 million tonnes over the previous year, we expect

agreement in 2011. It gave easy access to Japan in the Indian steel market. Indian industry has time and again demanded to take out the steel sector from the pact. But it can happen only after both the sides agree to do the same.

The bilateral trade between the countries stood at USD 14.51 billion in 2015-16. Trade is highly in favour of Japan. After the Japans first request for the panel was blocked by India at a meeting March 21, Japan has submitted its second request for a panel to determine whether Indias decision to impose a safeguard measure on imports of iron and steel products violate WTO rules.

In its reply India had stated that it was disappointed as Japan was insisting on the panel despite its sincere efforts to resolve the matter in consultations. India has said that the measures in question were completely consistent with WTO rules and justified by special circumstances.

Steel firms hit record sales, meet production targets

The domestic steel producers are optimistic about a demand pick-up from mid-April after record sales. The state-owned Steel Authority of India (SAIL) posted its best sales performance in 2016-17 with a growth of eight per cent. The company sold 13.143 million tonnes of steel in 2016-17 and March sales of 1.575 million tonnes

Daily7Tuesday 04, April 2017

a marginal improvement in profits because the company was able to raise the prices from October, 2016 onwards while in the previous months we were reducing the prices in line with global trends as well as the domestic demand," a company official said.

Taking the prices of lumps and fines together, the average price of iron ore sold by NMDC stood at Rs 1,796 per tonne in the first quarter, Rs 1,681 per tonne in the second quarter, Rs 1,991 per tonne in the third quarter while it was around Rs 2,100 per tonne in the January-March quarter in 2016-17. The current prices are still at a half way mark compared to the peak prices, sources said.

In spite of price increase, the sales jumped 25 per cent in the third quarter touching 10 million tonnes and almost a similar sales volumes were registered in the fourth quarter. Higher sales volume in the second half may, to a large extent, compensate for the lower prices at which little over 15 million tonnes of iron ore was sold to the customers in the first half of the year.

For the nine month period ended December 2016, the public sector iron ore miner has

reported a 20 per cent rise in income from operations at Rs 5,957.66 crore as compared to Rs 4,927.12 crore in the corresponding nine-month period in the previous year. While there was a 14 per cent increase in gross profit at Rs 2,503 crore for the 9-month period ending December, 2016, net profit was marginally down owing to a fall in interest income during the same period.

Vedanta's bauxite mine expansion gets mixed response

The public hearing held for getting consent from local community for the expansion of bauxite mine of Vedanta-controlled Bharat Aluminium Company (Balco) evoked mixed response.

The proceeding was held on Sunday last at Mainpat in Surguja district of Chhattisgarh, where the London-listed company had proposed to increase bauxite production from 750,000 tonnes per annum to 2.25 million tonne per annum (mtpa). Vedanta has a 51 per cent stake in Balco, while the remaining share belongs to the Government of India.

Daily8Tuesday 04, April 2017

A mammoth turnout was reported in the hearing. Over 2,000 residents participated, of which, nearly 800 residents shared their views.

The Balco management said environment, employment and local development were top priorities of the company and assured that it would consider suggestions made by the local residents as. The proceeding, however, received mixed response.

The local representatives, labourers working in the mine and local residents appreciated and supported Balco’s initiative to increase the output in Mainpat. The green activists, however, opposed the expansion plan stating that the company had failed to effectively implement the environment clearance (EC) norms in the mine.

Local legislator Amarjeet Bhagat said he supported the operation of mines as it provided benefits to local residents. Stating that Vedanta-Balco had taken up a good number of development works in the area, Bhagat said the management had been effectively implementing the suggestions given by the people.

The mine would feed the company’s Korba facility that had enhanced its aluminium production to 570,000 mtpa. Reeling under severe raw material crises, the company has been meeting the demand by shipping aluminium powder from Australia. But the process has been a costly affair.

Balco is eyeing to increase bauxite output to 5 mtpa. While it plans to increase the production in Sarguja mine to 2.25 mtpa, the expansion of Kawardha mine was also on card from where company plans to produce 3 mtpa of bauxite.

GST may take sheen off jewellery sector: Ind-Ra

Jewellery retailers continue to face uncertainty over the impending GST rates even as demand is expected revive from the seven-year low of 522 tonnes recorded last year.

The demand last year was impacted by several one-off events such as nationwide jewellers’ strikes and severe liquidity crunch due to demonetisation. However, the underlying jewellery demand still remains robust, given India’s strong macro-demographics and the consumer’s affinity towards gold, said an India Ratings report.

Over the past two years, the Centre has implemented measures to curb illicit trade practices in the jewellery industry, which is likely to benefit organised jewellers at the cost of unorganised ones, said the report. Demonetisation is likely to have a limited impact on the organised retailers this fiscal, it added.

Favourable market dynamics and government regulations are likely to improve organised retailers’ revenue growth to double digits next fiscal, said the rating agency, maintaining a stable outlook on organised jewellers.

On the other hand, cut and polished (C&P) diamond exporters’ balance sheets are likely to remain stretched next fiscal with demand hit by various government measures.

Though C&P diamond exports have rebounded, Ind-Ra believes midstream players continue to face headwinds for diamond jewellery demand owing to the political and economic environment in key export markets. Additionally, they continue to operate on thin margins and carry inventory and price risk, it said.

Ind-Ra expects rough diamond prices to

Daily9Tuesday 04, April 2017

remain stable in 2017, unless C&P decline sharply due to muted demand and rough producers are forced to lower rough prices again.

Mitsubishi Materials sees first-half copper output up 13 pct y/y

The Japan-based Mitsubishi Materials Corp

said it planned to produce 177,186 tonnes of

refined copper during April-September, up 13

percent from the same period last year as it

takes on more smelting capacity.

Japan's third-biggest copper smelter expects

output at its Naoshima Smelter and Refinery

in western Japan to rise 4 % while production

at Onahama Smelting and Refining, north of

Tokyo, is planned to increase about 30 %, it said.

The Onahama plant is jointly owned with

Dowa Holdings Co Ltd and Furukawa Co Ltd.

As part of an agreement between the partners,

Mitsubishi Materials is gradually taking a part of

the smelting capacity previously assigned to

Dowa, starting from the last financial year.

Dowa said its copper output during April-

Septemberis expected to fall 17.7 % from a year

earlier while Furukawa said it planed to increase

its first-half output by 1.3 % "Overall local

copper demand has been steady," a spokesman

at Mitsubishi Materials said.

The company is conducting a 27-day

maintenance at the Naoshima plant from

March 20 and it plans a 21-day maintenanceat

the Onahama plant starting from October 21.

Mitsubishi Materials plans to cut its lead output

betweenApril and September by 1.9 percent

due to lower supply of lead battery scrap.

The company's output plan is detailed below,

with comparisons against planned production

in the second half of the financial 2016/17 year

that ended March 31 and actual production in

the first half of 2016/17.

Southern Copper CEO hopes to prevent strike at Peru mines

Southern Copper Corp hopes to dissuade

workers at its Toquepala and Cuajone mines

in Peru from striking this month, as a second

labour union this year in the world's No.2 copper

producer seeks a larger share of profits.

The company's chief executive, Oscar

Gonzalez, said he did not think the labour

ministry would give the green light for the strike,

adding that the firm could hire contract staff

to protect output if its workers went against

the government. "A union in a country that's

facing economic problems can't paralyze a

company and keep it from generating revenues

for the state," Gonzalez said at the CRU World

Copper Conference in Santiago, referring to

Peru's faltering growth prospects this year amid

destructive flooding.

"They're the ones who are going to look bad,"

Gonzalez said of workers planning to strike.

The union, one of five representing Southern

Copper workers in Peru, plans to hold an

indefinite strike starting April 7 or 10, according

to a regulatory filing.

Gonzalez said a labour agreement with

workers was still in force and the company

was not planning to give them a bigger share

of profits, though it would seek agreement

through dialogue.