Peru’s President Pedro Castillo speaks upon his arrival at Congress amid a curfew in the capital Lima imposed over fuel cost protests that have spread across the country, in Lima, Peru April 5, 2022. REUTERS/Angela Ponce /File Photo
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LIMA, April 21 (Reuters) – Peru’s left-wing President Pedro Castillo has signaled a tougher stance on protests against mining companies that are unnerving the Andean nation, the world’s second-largest copper producer, and the army in a sharp tactical departure from an earlier conciliatory approach mobilize .
Since the end of February, the mining activities in Cuajone have been taken over by Southern Copper Corp. (SCCO.N) shut down as protesters from the predominantly Indigenous surrounding communities demand financial compensation and a share of future profits.
The government announced a state of emergency at the Cuajone mine on Wednesday, saying it would deploy military forces and suspend the right to protest at the mine, which has been closed for over 50 days. Continue reading
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That’s a major linchpin for Castillo, a former teacher who took office last year backed by voters in poor mining districts hoping for a bigger share of Peru’s natural resources. He has avoided clashes with protesters despite a series of blockades that have hit the country’s main export sector.
“The problem must be solved now,” Peru’s Prime Minister Anibal Torres said on Wednesday, citing “irrational” demands from the Cuajone community, including demands for $5 billion in payments. “That prompted us to declare a state of emergency.”
Meanwhile, last week residents of the Fuerabamba indigenous community pitched their tents just meters from China’s MMG Ltd’s (1208.HK) giant Las Bambas open pit copper deposit.
The protests have taken a total of 20% of Peru’s copper production offline at a time when the Andean country is grappling with slower growth amid high global inflation.
“Under this administration, there are more mining protests and they are more serious,” said Pablo O’Brien, a mining expert who served as an adviser to several mining ministers, including Castillo.
“The protests are lasting longer than ever and have spread to regions where previously no social conflicts were seen.”
Protests have also hit other mines in Peru since Castillo took office last July, including Anglo-Swiss Glencore (GLEN.L) Antapaccay and Canada’s Hudbay Minerals Inc (HBM.TO) Constancia and Antamina mines. jointly owned Glencore and Anglo-Australian mining group BHP (BHP.AX).
In neighboring Chile, world-leading copper producer BHP is also facing roadblocks that have disrupted operations at its large Escondida mine, forcing the company to cut its annual copper production forecast this week.
But the pinch was felt more in Peru, where Cuajone and Las Bambas together account for 1.5% of the country’s gross domestic product. Southern Copper and MMG shares are down over 5% and 8%, respectively, over the past week.
Las Bambas executives have urged the government to declare a state of emergency at the mine as well.
“Las Bambas is currently coordinating with the government and we hope they can take the same action for Las Bambas,” Wei Jianxian, MMG’s executive general manager for the Americas, said in a conversation with analysts this week.
A government press official said they were not aware of any plans for a state of emergency for Las Bambas.
But protesters say they are intervening in the long term, suggesting disruptions in the mining sector will not be easy to fix and the industry will continue to pressure the government to take tougher action.
“We could stay here for years,” Edison Vargas, 32, the president of Fuerabamba Municipality, told Reuters. Vargas and others have set up camp in Las Bambas and say they are demanding the return of their ancestral lands.
The mine had relocated around 400 Fuerabamba families to a compact town called Nueva Fuerabamba over a decade ago to make way for the construction of Las Bambas, one of the top copper mines in the world. It paid residents 600 million soles ($161 million) in compensation for the move, mine managers say.
Notorious for mining conflicts, Las Bambas has faced over 450 days of roadblocks since the mine opened in 2016.
“If the government wants to turn its back on us, we’re ready,” Vargas added. “We’d rather die here in our old lands than in Nueva Fuerabamba.”
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Reporting by Marcelo Rochabrun; Edited by Adam Jourdan and Aurora Ellis
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