Yesterday 20:06
Peru will take several measures to facilitate mining investment as a way to stimulate the weakened economy. But will stop short of pressuring Andean communities to accept two key projectsa senior official said on Thursday.
The Minister of Energy and Mines, Óscar Vera, said in an interview that this is a democratic Government, which respects the way of thinking of the people.
His comments – made within the framework of the Perumin mining event – are the clearest signal so far of the Administration’s position regarding the Tía María de US$1.4 billion, from Southern Copper Corp., which has been strongly opposed by local communities despite having all permits to begin construction. Vera’s comments also have implications for MMG Ltd.’s Las Bambas copper mine, which has permits to build a new well, but has not been able to begin work due to community opposition.
Although the Government supports the project, it would not intervene on behalf of the companies, since, according to Vera, they have to solve their own problems.
The Peruvian economy is mired in a deep recession
Togetherthe two projects would add 220,000 metric tons of copper production annually, worth about $1.8 billion at current prices. Its development would be much faster than projects that are still going through Peru’s long permitting processes, which can last years and are the cause of complaints in the industry.
It is a delicate situation for President Dina Boluarte, who assumed power after the dismissal of Pedro Castillo amid a wave of protests that caused the death of 50 civilians and the destruction of mines. Boluarte has managed to keep the copper flowing since March by deploying police and military, providing protection in an economic downturn.
Bureaucracy is the main obstacle for copper projects in Peru
The construction of Tía María and a new well at Las Bambas would provide another necessary boost to the economy at a time when mining investment is falling. But giving them a push without the required buy-in from the community would leave them open to protests and could further erode their own support. A 2019 decision approving Tía María’s license sparked weeks of protests, with former President Castillo calling the stalled project a failure.
The economy—one of the most prominent in Latin America in recent decades— is in recession and faces more obstacles due to the El Niño climate phenomenon, which is already affecting the agricultural sector.
Las Bambas, whose current well is running out, has said that pIt can begin exploiting the new well next year if it receives authorization from an indigenous community. Southern Copper would take longer, but the company says it is ready to start building as soon as it can reach an agreement with nearby communities.
Last year, Chinese-owned Las Bambas received permission to build a new well, but was unable to do so due to opposition from the Huancuire community. The same year, community members organized protests on the Las Bambas lands they previously owned. Since then, the two sides have been negotiating a way forward.
Vera was optimistic that an agreement could be reached, but did not set a deadline. He pointed out that very good news will be known very soon. He said that if not today, it will be tomorrow or the day after tomorrow.
