Peru Won’t Force Contested Mining Projects on Communities

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(Bloomberg) — Peru will do a lot to facilitate mining investment as a way to boost the ailing economy. But it will stop short of pressuring Andean communities to accept two key projects, a top official said Thursday.  

“There’s no way — we are a democratic government,” Energy and Mines Minister Oscar Vera said in an interview. “This is a government that respects the way people think.”

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His comments — delivered from the Perumin mining event — are the clearest indication yet of the administration’s stance regarding Southern Copper Corp.’s $1.4 billion Tia Maria project, which has been heavily opposed by local communities despite having all permits to begin construction. Vera’s remarks also have implications for MMG Ltd.’s Las Bambas copper mine, which has permits to build a new pit but hasn’t been able to start work due to community opposition. 

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While the government supports the project, it wouldn’t intervene on behalf of companies. “They have to solve their issues,” Vera said. 

Read More: Peru to Keep Copper and Investments Flowing With Unrest in Check 

Together, the two projects would add 220,000 metric tons of copper production a year, worth about $1.8 billion at current prices. Their development would be much faster than projects that are still navigating Peru’s years-long permitting processes, a cause for complaints in the industry. 

It’s a delicate dance for President Dina Boluarte, who took over after the impeachment of Pedro Castillo amid a wave of protests that led to 50 civilian deaths and disrupted mines. Boluarte has managed to keep copper flowing since March by deploying police and military, providing a buffer in an economic downturn. 

Building Tia Maria and a new pit at Las Bambas would provide another badly needed boost to the economy at a time when mining investment is slumping. But pushing them through without the required community acceptance would leave them prone to protests and risk further eroding to her own support. A 2019 decision to approve Tia Maria’s license unleashed weeks of protests and former President Castillo singled out the stalled project as a non-starter.

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The economy — one of Latin America’s standouts in past decades — is in recession and faces further headwinds from the El Nino weather phenomenon that’s already hitting the farming sector.  

Read More: Chinese-Owned Mine Hit by More Delays in Key Peru Copper Project

Las Bambas, whose current pit is depleting, has said it can start mining in the new pit as early as next year if it gets the green light from an indigenous community. Southern Copper would take longer, but the company says it’s ready to start building as soon as it can reach an agreement with nearby communities. 

Chinese-owned Las Bambas was cleared to build a new pit last year but has been unable to do so due to opposition from the Huancuire community. Last year, community members staged protests on Las Bambas land that they previously owned. The two sides have been negotiating a way forward since. 

Vera said he’s optimistic an agreement can be reached, without nailing down a time-frame. “Very soon you will see very good news,” he said. “And if it’s not today, it will be tomorrow, or the day after tomorrow.” 

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