By Marcelo Rochabrun

PISACCASA (Reuters) – Gabino Leon is mad, but he’s not the only one.

A farmer from Peru’s south Apurimac area watches as trucks carry hundreds of people past his home. The truckers kick up dirt on the road, which has been a focal point for demonstrations against the country’s No. 2. The largest metal producer.

Leon’s rage, which is echoed throughout hundreds of small hamlets in the South American country, Reuters reports, stems from his belief that he doesn’t see any benefit from the mineral wealth at his doorstep, and that mining has caused him to lose his subsistence farming livelihood.

Leon stated to Reuters that all of Apurimac’s wealth is now in front of his eyes. He lives about 20km (12 miles) from MMG’s Las Bambas mine which opened production in 2016, and provides approximately 2% world copper. It leaves us without anything.”

People in Peru are skeptical about the impact of mining on their daily lives. However, they have become bolder under the socialist President Pedro Castillo. Castillo came to power in July and promised to shake up mining to redistribute more copper profits.

Reuters travelled hundreds of miles on the mining corridor through Cuzco and Apurimac, which are rich in minerals, as well as an Ancash mining highway. Interviews with more than 60 residents revealed that the most common complaints were pollution of water supplies, insufficient infrastructure and jobs as well as dust from trucks, which locals are accused of killing crops.

Castillo directed local officials not to harass protestors and did not inflict martial law on the area to preserve order. Such a tactic was used often by Presidents of the United States.

Castillo’s appointment has seen an increase in mining protests. Most of these occur in Andean locales where Castillo received strong support. According to a Tuesday report from the Observatory of Mining Conflicts that will be published by the non-profit Observatory of Mining Conflicts. Castillo was supported 91% in Cotabambas where Leon and Las Bambas live.

Las Bambas said that it will cease operations in the event of a blockade to the mine corridor.

Hochschild, the London-listed Silver Miner, lost over 50% in its last month of trading after an official from Peru said that the extension would not be given to two mines. The officials were responding after local residents complained about their pollution. Hochschild stated in a filing it rejected the allegations. Since then, Hochschild and the government both have indicated that they are engaged in dialog.

In recent months, blockades in the mining corridor also struck Hudbay Minerals Inc’s Constancia and Glencore Inc’s Antapaccay copper mines. Meanwhile, protests further north caused temporary halting of operations at Antamina which is jointly owned by BHP and Glencore as well as Teck Resources (NYSE 🙂 and Mitsubishi.

Reuters spoke with major mining corporations, who claimed that large tax payments are made, that local jobs are created, and that there is no pollution from their mines.

However, tensions in Peru have made matters more difficult. The tensions have raised questions about investment prospects in Peru where the country’s economy relies on copper mining income.

Raul Jacob (president of the National Mining Industry Group) stated that there are ten locations where mining operations have been affected or blocked. The most notable case is the Las Bambas mining corridor.

It can’t happen that the mine corridor gets blocked every week.

We SHARE the Worries

Peru’s mining corporations claim that they are paying their taxes.

In September, Las Bambas stated that it had paid tax payments of 4.9 billion soles ($1.21 million) over the past year. These operations account for around three quarters (or 406,000) of Apurimac’s economy.

Apurimac’s poverty has not fallen in the years since its mine began operation. It was at 35% by 2020. The pandemic has wiped out small gains. It is well above the Peru average.

Carlos Castro from Las Bambas, head of corporate affairs said that they share these worries. According to Castro, the issue was that local governments did not use their mining income efficiently. Castro said that Castro was providing training to the local government on managing public spending.

Baltazar Lantaron, Apurimac’s governor, stated in an interview this year with local media that the problem was complicated and that funds sometimes are not allocated to the right region at the appropriate time. According to data from the finance ministry, Apurimac spent $88 millions of $130 million it received this year through mining income.

Castillo is now pushing Congress for a higher tax on mining.

Jose de Echave said, “We’re doing a reform in the beginning of (commodities), cycle,” adding that it was difficult to figure out how to “intervene before social conflicts occur.”

He stated that Peru has lost 8 to 9 years of tax revenue, which could have been used to pay higher taxes. His comments were made in reference to the mining reform Peru passed during the commodities boom.

Victor Villa and De Echave, who provide legal advice for protesters blocking the Chumbivilcas mining corridor, said that the government is also being less confrontational.

Villa stated, “I believe (Las Bambas), was hoping for a declaration of martial law,”

DUSTY ROADS

Dust is a common complaint among dozens of farmers Reuters interviewed. The dust can cause irritation in the area around the mine corridor. This road is unpaved and dirt for long distances. The dust is a problem for smallholder farmers in many of the Apurimac or Cuzco region it crosses.

As 53 trucks drove past her adobe house, Veronica Montes said, “The dust pollutes. It kills our livestock. It decreases our crop productivity.”

Claudio Caceres was Las Bambas’ general counsel. He said that dust issues are “a fact” and the company was working to address them.

He stated, “The dust exists.” According to technical studies, the dust does not pose a threat to human health.

Mining firm has supported the plan of the government to pave portions of the road, and possibly build a railroad to transport the metal along the coast.

Residents of Alto Huarca are further south and live under Antapaccay’s pyramid stack with dry tailings.

Elena Alvarez claimed that the mine polluted a stream she relied on for water, which was used by her and her animals as drinking water. This affected her health and finances.

Alvarez stated, “Before mine, I used milk production and made money. But now, we’ve fallen into financial ruin”. He doesn’t have mains electricity nor plumbing.

Antapaccay’s chief executive Carlos Cotera denies that the mine polluted local waters.

In a statement, he stated, “Mineral content is a real issue, it’s related to the natural existence of these minerals in soil” and was not due to mining.

He also said there were problems with communities benefitting from mining profits. We believe that the existing distribution system is not able to reduce social divisions.

While the government is active in mediation of conflicts between businesses and local communities it can also be difficult or brief to broker truces.

MMG rejected Monday’s deal with Chumbivilcas to prevent Las Bambas shutdown. Protestors in Chumbivilcas protested, prompting counter-protests and protests from miners worried about their jobs.

In October, the community reached an agreement for additional transport jobs in Las Bambas. However, they blocked the road once again as the offer of too few jobs is not enough.

Leon, a farmer who drove three hours along the mine corridor to hear about protests, thought that it was time for Cotabambas, his province, to adopt a similar strategy.

He stated, “We desire what others have and can get it.”

($1 = 4.0651 soles)