MAC: Mines and Communities

Puno mining protest: 6 killed in clashes, Peru

Published by MAC on 2011-06-28
Source: Associated Press, AFP, Globe and Mail

Government revoked licence of Canadian mining firm Bear Creek

A wave of anti-mining protests in the Puno region of Peru reached day 50 last week. The protests began with the demand to revoke a silver mining concession granted to Canadian-based Bear Creek Mining Corporation. They later expanded to oppose other mining activities (and environmental impacts) in the region, which also included opposition to the much debated Inambari hydroelectric project.

Last weekend, in Juliaca, protesters took over the Manco Capac airport only to be shot with live ammunition by the police resulting in 6 people killed. These tragic events adds on to a number of unresolved social conflicts and violent confrontations in the country, many of them related to mining, and which will be a dark legacy for Alan García’s government.

As one commentator suggested, the possibilities of protest and the limits of resource extraction are being rewritten in the Puno region. On the other hand, as the government has agreed to revoke Bear Creek's license, in the near future this will be just one of several possible international arbitration proceedings brought under the investment chapters of Free Trade Agreements.

Previous coverage on MAC: 17,000 Peruvians protest presence of Canadian mining company


Untangling Puno mining protest reports (or, why English-language wire reporters should read the local press)

By Carwil James

25 June 2011

Protest at Puno on Peruvian border
Protest at Puno on Peruvian border
Photo: Dante Piaggio, El Comercio

The wave of anti-mining protests in the Puno Region of Peru reached day 50 today. Yesterday, June 24, was a particularly dramatic day, however: the Peruvian government announced that it will annul the mining concession for the proposed Santa Ana silver mine in Huacullani District, near the Bolivian border southeast of Puno; and in Juliaca, other protesters took over the Manco Capac airport in Juliaca, north of Puno, only to be shot with live ammunition by police.

These were both very important events in the seven-week-long protests. But they were also the two kinds of events that the English-language press steps in to cover: economic loss to Western corporations and deadly violence. If it bleeds, it leads is a key phrase for journalism, but if it bites the bottom line, it makes the business pages is just as important.

Unfortunately, the coincidence of these two newsworthy events led a string of English-language outlets to treat one as causing the other.

In fact, there is quite a bit of separation: the Santa Ana mine was the lead issue for the primarily Natural Resources Defense Front of the Southern Zone of Puno (Frente de Defensa de los Recursos Naturales de la Zona Sur de Puno), which joined forces with National Confederation of Peruvian Communities Affeted by Mining (Spanish: Confederación Nacional de Comunidades del Perú Afectadas por la Minería; Conami).

The Defense Front, a predominantly Aymara organization, is based near the border and had organized an earlier regional general strike against the Santa Ana Mine in April. It joined forces with the largely Quechua Conami for a larger regional protest from May 7 to June 1. When protests resumed after the victory of Ollanta Humala, new forces got involved, many but not all also concerned with mining elsewhere in the Puno Region.

These include protests in Carabaya province [the Puno region has 13 provinces, divided in 107 districts] against mining concessions and the Inambari hydroelectric power plant; protests in Melgar, Juli, and Sandia over local mines; and Azángaro (whose capital is Juliaca) demanding decontamination of the Ramis river from pollution caused by small-scale mining. Outside of the Defense Front, most peasants in these regions are Quechua-speakers, not Aymaras.

The story is the strike wave, which has rippled across the region. And the other surprising story is the willingness of the government to deal openly with the strikers: even in May, substantial concessions were granted to the protests (including a 12-month delay in the Santa Ana mine and a regional commission to study all mining in southern Puno Region).

The possibilities of protest and the limits of resource extraction are being rewritten in Peru. However, it didn't bleed, so it didn't lead. Indeed, for English-reading outsiders, it didn't even get covered. Blame this on editors and the priorities of understaffed media organizations.

However, when things got interesting for the newswires, they assigned the story, apparently to reporters far from the scene. And the results juxtaposed the shootings in Juliaca and the victory in Chuquito Province in ways that distort the truth:

Associated Press, "Peru cancels mine after 6 killed in clash" somehow fails to mention the demands of protesters in Juliaca, and gives the false impression that the clash led to the concession.

Agence France-Presse, "Peru halts Canada mining operations amid protests": "Peru suspended a Canadian company's mining project in the south of the country on Saturday following intense negotiations in the wake of deadly protests by mostly indigenous anti-mining activists, authorities said." "In the wake of" is fuzzy talk for afterwards without committing to a connection.

In fact, the negotiations preceded the deadly violence, with a commitment to annul the Santa Ana mine being made verbally to the Defense Front on Wednesday and Thursday, with confirmation on Saturday. As discussed above, anti-mining protesters in Juliaca have other demands. Later in the article, "Protests have since spread to the provinces of Azangaro, Melgar and now the city of Juliaca." Juliaca is the capital of Azangaro, and protests occurred there in late May, as well as early June. Nonetheless, AFP did some homework; this is spot on: "They then expanded to include opposition to other area mines, and now include opposition to the Inambari project, an ambitious plan to damn several Andean rivers and build what would become one of the largest hydroelectric power plants in South America."

Voice of America, "3 Killed in Peru Airport Clash": Contributes one fact: the result of a hospital phone call to Juliaca ("A doctor said the three people killed died from gunshot wounds Friday at Manco Capac airport in the city of Juliaca in Puno state."), but mis-identifies the protesters as Aymara Indians-0.28% of Azángaro Province is Aymara. The hospital workers, through no fault of their own, understated the death toll by half.

Reporting like this is far less effective than paying translators to read the local press (Los Andes in Puno has been among the most comprehensive; see their chronology) and fact-check one against the other. If you're reporting on these issues, I'd really like to know your process and point you in the direction of reliable background information. Seriously, where are you and what do you read?

Credit where credit is due: Reuters got the story right, noting "On Friday, hours before the deadly clash at the airport, Garcia's cabinet revoked the license of Canadian mining firm Bear Creek in a bid to persuade locals residents to end protests that have dragged on for more than a month."

Peru anti-mining protesters killed in clashes


25 June 2011

JULIACA, Peru - At least five activists opposed to mining in southeastern Peru were killed when riot police fired tear gas and shot pellets to keep demonstrators from storming the city airport, a local doctor told AFP early Saturday.

The violent protests come in the final weeks of the presidency of Alan Garcia, who hands power over to leftist president-elect Ollanta Humala on July 28. Garcia is leaving so many unsolved social problems that Humala recently pleaded with him to address the most pressing issues and "not give us a mine field."

Police also apparently used firearms in Juliaca, because the protesters who were killed, including one woman, had all been shot, local hospital doctor Percy Casaperalta told AFP.

The victims were part of a group of some 1,000 mostly local Aymara Indian farmers who tried to storm the Inca Manco Capac international airport in Juliaca on Friday. At least 32 protestors were wounded in the battle, Casaperalta said.

The province of Puno has been in the grips of a wave of protests against mining projects, led primarily by the Aymara Indians, a majority ethnic group in this part of the country. They are demanding an end to mining activity and oil drilling in Puno, one of the Peru's poorest areas.

The activists say that mining operations pollute the land and waterways, leave few local benefits, and that the concessions were granted without consulting local interests.

Interior Minister Miguel Hidalgo said that protesters attempted to storm the airport twice. He said they also attacked a police station in the nearby city of Azangaro and tried to set a customs office on fire.

Some protesters managed to breach the security barrier and penetrate the airport in the hopes of disrupting air traffic, while others burned grasslands around the airport, paralyzing planes on the tarmac.

Airport authorities were forced to cancel flight departures and arrivals due to the clashes on this second day of a 48-hour strike in Juliaca enacted by labor unions and farmers.

For three weeks in May, the protesters blocked vehicle traffic between Peru and Bolivia, and then cut off all access to the city of Puno, population 120,000, for a week. Protests have since spread to the provinces of Azangaro, Melgar and now Juliaca.

The mining protests began as a demand to revoke a silver mining concession granted to Canada-based Bear Creek Mining Corporation.

They then expanded to include opposition to other area mines, and now include opposition to the Inambari project, an ambitious plan to damn several Andean rivers and build what would become one of the largest hydroelectric power plants in South America.

Protest leader Walter Aduviri is in Lima for talks with the government, but the negotiations have yet to reach an agreement.

In early June Eduardo Vega of the national ombudsman's office counted 227 unsolved social or environmental conflicts in Peru.

The outgoing Garcia administration has shown little interest "in at least finding a temporary solution to these problems," according to sociologist Eduardo Toche.

Peru revokes licence of Canadian mining firm Bear Creek

By William Lloyd George

Globe and Mail

26 June 2011

As smoke rose from burning tires and torched security vehicles, heavily armed police confronted nearly a thousand angry anti-mining protesters walking the runaway of Juliaca’s airport in southern Peru, near Lake Titicaca. One protest leader called for the group to reclaim the airport. Others said it was too dangerous. Then a call came through from the protest leaders in the capital, Lima.

The government had given into their demands and agreed to revoke the licence for Canadian mining firm Bear Creek to open its Santa Ana silver mine in the area; as well, it halted all new mining concessions in Puno province for 36 months. The unrest ended with the agreement Saturday, narrowly averting a repeat of a bloody conflict the day before, when police killed at least five demonstrators at the airport.

While the breakthrough agreement stopped further bloodshed, it casts doubts on other resource operations in Peru, a nation that relies heavily on foreign investment and receives about 70 per cent of its GDP from the mining industry. Peru is South America’s fastest-growing economy, driven by surging commodity prices, but the rural poor have benefited little from mining and complain it contaminates their water and crops. The incoming government must balance the interests of international resource firms, whose production is a huge source of national wealth, alongside those of protesters who argue mines have a devastating impact on the environment.

“Perceived protester success in the Puno region has the potential to empower a more broad-based anti-mining movement in the country, causing investor uncertainty over the security of exploration and mining concessions throughout Peru,” BMO Nesbitt Burns analyst Andrew Kaip said in a report on Sunday

The recently approved Santa Ana project in southern Peru has become a symbol for thousands of protesters opposed to mining and energy projects in the run-up to the recent election, which was won by left-wing nationalist and former army rebel Ollanta Humala. Protesters are using forceful demonstrations to pressure Mr. Humala’s administration as it decides on changes to legislation for resource firms after it takes office on July 28. Outgoing president Alan Garcia told reporters on the weekend that “dark political interests” were to blame for the deadly clashes in Puno province, which is in the southeastern region of the country.

With his presidency nearing an end, it is widely believed that Mr. Garcia gave into the demands to avoid the violence escalating under his watch and instead chose to pass the problem over to Mr. Humala

Edwin Gallegos Pasco, dean of the engineering faculty at the regional University of Altiplano, said the protests will only reduce development in the region. He argues that the formal mines bring development and less contamination than the informal mining, which will increase in place of the foreign-run mines.

Prof. Pasco believes, though, that the government is to blame for the protests, saying there is a lack of education about mining. He argues that the government should be informing the people in “peaceful times” how the contamination levels are lower in multinational mines than in smaller independent mines.

“The government always waits till it’s too late and there is a problem,” says Prof. Pasco adding that the government needs to use the income from mines more efficiently. “Their mismanagement of the economy is also to blame for the protests.”

Seeing this as a cause of the conflicts, Mr. Humala said that he will create aid programs for poor communities in order to distribute Peru’s wealth and end social conflicts over natural resources.

While the agreement may have the short-term effect of stopping the protests, many within the rallies around Juliaca voiced similar concerns about the government’s inability to share the wealth.

At a peaceful rally on Saturday afternoon in the centre of the city, speaker Andre Juli, a 42-year-old businessman, said the protesters had come together from different parts of the region to call for an end to the contamination of local waters by mining operations, which destroy their farms and do not benefit the local communities.

“The government taxes all these mines, which are destroying our environment and still we don’t see any investment in infrastructure” Mr. Juli said, standing at the back of the rally. “We have no good schools, no good hospitals. If they aren’t going to share the profits, then we should just do the mining by ourselves.”

At the funeral of a man killed in the protests, one woman from Azangaro, who did not want to share her name for fear of reprisal, said all of her farmland has been destroyed by the waste of the multinational mines.

“Even if they cancel future mining concessions, we still have to face the mines already being operated.” she said. “I don’t have any cattle, any fish, any farm left. I have nothing so I am ready to die to get our land back.”

Despite the calm being restored to Juliaca, the danger of protests igniting again remains.

Standing next to his 16-year-old son lying in a hospital bed with a bullet wound in his leg, Luis Antonio Jara, 45, said Mr. Garcia should go to prison for the killing of protesters. When asked if he believes in any agreement between the protest leaders and the government he answers abruptly. “No way. They have promised us many things before and never followed through,” he said. “We are ready to defend and die for our land”.

Canadian mining firm threatens legal action against Peru

By Brenda Bouw

Globe and Mail

26 June 2011

Canada’s Bear Creek Mining Corp. is threatening a legal challenge against Peru after its mining rights were revoked in a move that raises the risk for other resource companies doing business in the mineral-blessed South American country.

“We have done nothing wrong,” Bear Creek chief executive officer Andrew Swarthout said in a telephone interview on Sunday from Peru.

The company has been working for more than a decade in Peru with some challenges, but Mr. Swarthout said this is the first time its mining rights have been pulled.

The Santa Ana mine was expected to produce about 47-million ounces of silver over its 11-year mine life and represented about 20 per cent of Bear Creek’s value, behind its flagship Corani project, also located in Peru.

“This is a rather unique situation and we are scratching our heads,” Mr. Swarthout said, calling the move by the outgoing government of Peruvian president Alan Garcia “the wrong reaction to a political situation.”

Bear Creek is not the only victim, BMO Nesbitt Burns analyst Andrew Kaip noted in a report Sunday, “with protesters demanding that concessions be revoked for all mining companies over concerns about potential pollution.” He cited permits for the Inambari hydroelectric development project that were recently revoked under similar circumstances.

While Bear Creek’s stock has already been hit hard as a result of the protest in recent weeks, having fallen more than 50 per cent since April, BMO said it expects the decision to “spook the market, with investors questioning the security of the company’s larger Corani project.”

Other Canadian companies with operations in Peru include mining giant Barrick Gold Corp., which has two mines in the country. Canadian miners such as HudBay Minerals Inc., First Quantum Minerals Ltd., Sulliden Gold Corporation Ltd. and Trevali Mining Corp. all have projects under way there. While none of them have reported problems with their projects in recent weeks, investors are expected to express caution.

“I think it’s safe to say the whole investing world is waiting to see what the government does,” Mr. Swarthout said. “What happened isn’t going to calm anyone’s nerves.”

Mr. Swarthout is hoping for a solution, but said his company is threatening legal recourse if the government’s decision isn’t reversed. The company stated that it plans to “immediately and vigorously defend its rights” through action under the Canada-Peru Free Trade Agreement as well as Peruvian appeal processes.

Its legal team is working on what actions the company could take and this will be decided within the week, Mr. Swarthout said. The company is also hosting a conference call on Monday morning for investors to explain the situation in Peru.

Bear Creek said there are up to 15 other foreign companies investing in mineral exploration projects under similar decrees to the one it had revoked, and that it plans to discuss the problem with them.

“I expect that many exploration and mining companies are very concerned about this precedent, and we will be reaching out to all of them,” he said.

Some companies operating in Peru say they aren’t worried about similar actions against their operations.

“These are specific issues related to specific projects,” said David Garofalo, CEO of Toronto-based HudBay, which recently entered Peru with the purchase of Norsemont Mining Inc.’s Constancia copper project last year.

HudBay’s project, now in the pre-construction phase, is in a remote region and hasn’t been the target of grassroots protesters, he said.

“I don’t think it speaks to the receptivity of mining in Peru,” he said.

Swiss-based Xstrata plc said there has been no unrest at the company’s operations in Peru.

Xstrata said its $4.2-billion Las Bambas copper project and its $1.47-billion Antapaccay project “are both advancing according to plan,” a company spokesperson said in an e-mail on Sunday.

Still, Bear Creek is not the first miner to have its project shelved as a result of social unrest in Peru.

U.S.-based Southern Copper Corp., a unit of Grupo Mexico, recently put its $1-billion Tia Maria copper project in Peru on hold due to opposition from farmers worried about area water shortages. In recent years, three towns in northern Peru voted against Chinese miner Zijin’s $1.4-billion Rio Blanco copper project because of fears the mine would pollute rich agricultural lands. Meanwhile, Newmont Mining halted plans to look for mineral deposits in Cerro Quilish.

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