"We were expecting something more fair from the government because the company has the economic wherewithal to meet our requests," said Julio Ortiz, a labor leader.

But Ortiz said the mine's 1,200 employees were back on the job nonetheless, ending a stoppage that began October 10.

The striking workers were seeking a $3.80 a day pay hike but settled for the $2.10 rise set by the government, which mediated the dispute. The mine's management had offered a $0.77 a day increase.

The miners make about $577 a month.

Operated since 1993 by a subsidiary of the Shougang Group, the mine in Marcona, 460 kilometers (285 miles) south of Lima, produced more than nine million tons of iron ore in 2011 and earned more than $500 million.