Argentina extends order for Vale not to lay off workers.

BUENOS AIRES, 19 April (Reuters) The Argentine government on Thursday extended a temporary order requiring mining company Vale and its contractors to continue paying the wages of thousands of workers at Rio Colorado, a potash extraction project that was suspended by the company in the Mendoza district.

The resolution will be extended for 30 working days starting next Monday, when the previous mandate expired, to prevent a wave of layoffs due to the paralysis of the Rio Colorado project from triggering a social crisis in the region, just months before President Cristina Kirchner faces crucial legislative elections.

The measure to maintain wages, which caused diplomatic friction between Argentina and Brazil, will also give Vale more time to close a deal with a company interested in continuing the project before the government is forced to withdraw the concession.

"Until the end of the preventive crisis process (which lasts 30 working days), no employer should implement dismissal or suspension measures, nor can workers initiate strikes or other union action measures," the Ministry of Labor said in a statement.

Approximately 6.900 people were hired by Vale and other companies to carry out the project, which involves the extraction of potassium chloride, its transport by rail, and shipment from Argentine ports to Brazil.

In March, Vale announced the shutdown of the Rio Colorado plant, where it had invested at least $2,2 billion as part of its goal to become one of the world's largest fertilizer suppliers.

The company put the project under review in April 2012 due to concerns about inflation, taxes, infrastructure, and the exchange rate policy of the neighboring country, according to the company's president, Murilo Ferreira, at the time.

(Reporting by Alejandro Lifschitz)