MAC: Mines and Communities

Peru: Exploration investment to keep falling due to social conflicts, expert says

Published by MAC on 2013-01-07
Source: Business News Americas,

Exploration investment to keep falling due to social conflicts, expert says - Peru

By Tiffany Grabski

Business News Americas

20 December 2012

Investment in mining exploration in Peru will continue to fall if the government does not take further action to prevent social conflicts, industry expert Miguel Santillana from research center Instituto del Perú told BNamericas.

Recent legislative actions such as the prior consultation law passed in 2011, the new agency to approve environmental impact studies, Senace, which was approved in November, and a bill that has still to be passed on territorial organization, are all part of government efforts to ameliorate social conflicts in Peru, but Santillana does not believe they will be successful.

"Senace, territorial organization and the prior consultation law are sources of future conflict because there are vested interests that manipulate information and want to impose criteria that are not part of the law," Santillana said.

Furthermore, incidents such as the kidnapping of geologists researching for Candente Copper in Cañariaco, and a previous kidnapping of geologists in Cajamarca region, will continue to happen if the government does not respond, and will continue to effect investments, according to Santillana.

Global exploration spending is set to reach a new record of US$21.5bn in 2012, according to the latest forecast from Canada-based SNL Metals Economics Group.

Peru is also seeing an increase in exploration spending, but at a lower rate than the rest of the world, raising concerns at the country's mining, oil and energy society SNMPE.

"The situation becomes worrisome when reports such as this [by SNL MEG] confirm that Peru has fallen from first place as a mining exploration investment destination in Latin America to third place behind Mexico and Chile," SNMPE said in the latest edition of its monthly publication Desde Adentro.

"Internal factors, such as social conflicts, delays in permitting and authorizations to explore or operate, among others, are passing the cost on to the country. Between 2010 and 2011 [Peru] fell from fifth to eighth place in the global ranking of mining exploration investment destinations," SNMPE added.

Santillana agrees with SNMPE's conclusions and believes social conflict is the main deterrent to investment in Peru.

Mining investments worth over US$7bn have been deferred this year, with over US$10bn in project investment expected to be deferred in 2013 and 2014, SNMPE president Pedro Martínez said in a recent interview on local radio.

Similarly, CooperAcción's director and former deputy environment minister José de Echave recently said that the NGO expects only one third of the US$53bn mining project pipeline in Peru to be realized in the next five years due to intensified social conflicts in the mining sector.

The country's ombudsman registered 150 active socioenvironmental conflicts in its November report, 107 of which were in the mining sector.

BHP holds a whopping 1,425 permits in Peru

Cecilia Jamasmie

2 January 2013

BHP and Barrick the miners with more permits granted in Peru in 2012

BHP Billiton Ltd., Barrick Gold Corp., Sesuveca del Peru and local Cia. de Minas Buenaventura SAA, were the four mining firms that won the largest number of Peruvian exploration concessions in 2012, reports local newspaper Gestion.

According to the article, 582 companies requested an exploration permit last year, but only a few got most of them. In fact, from the 4,668 permits granted, giant miner BHP obtained 144; Venezuela's Sesuveca, 151; Cia. de Minas Buenaventura SAA got 100; and Barrick Gold, 84.

To date, BHP holds the rights to 1,425 potential projects in Peru, followed closely by Buenaventura, which owns 891.

New abuses against Environmental Defenders in Cajamarca

Grufides statement

16 December 2012

This Saturday December 15th, GRUFIDES lawyer Mirtha Vasquez had her home broken into by unknown persons for the 2nd time in three weeks. During the first break-in, persons entered her home without stealing anything, but left the doors wide open. Last Saturday they broke the window of her sitting room and entered without taking any objects of value. The break-in occurred during the short time when her baby-sitter and infant daughter went out for a walk in a nearby park.

On Friday the 14th, unidentified subjects broke the mirrors on the truck belonging to Sergio Sanchez, an environmental expert at GRUFIDES. It is strange for delinquents to break truck mirrors - usually they steal them to sell on the lucrative black market of stolen auto-parts.

Five weeks ago, a subject broke into the home of Ivett Sánchez, the GRUFIDES secretary, and like the attempts against Ms. Vasquez's home, nothing was stolen.

During each of the break-ins, the homes were empty, indicating that there is some mechanism of surveillance or telephone interception that allows the perpetrators to carry out their crimes unseen.

This past July, Peru's top weekly newsmagazine Caretas reported that at least two intelligence services operated by the Peruvian government are carrying out surveillance operations against renowned environmental leader Marco Arana. (Father Arana was also savagely beaten by Peruvian police forces in the main square of Cajamarca on July 4th, and held illegally in the city's police station, where he was tortured and beaten before finally being released some 13 hours later. Arana is still recovering from the injuries sustained during this incident).

It's clear that these crimes are an attempt to intimidate environmental defenders working at GRUFIDEs, a non--profit organization based in Cajamarca that has defended farming communities from abuses by the US-owned Yanacocha Mine for more than a decade. The corresponding authorities should investigate these incidents and discover the author or authors.

Members of GRUFIDES have made several people 'unhappy' of late.... GRUFIDES lawyers Amparo Abanto and Mirtha Vasquez have pressed charges against the police officers responsible for the attack against Marco Arana in July and this Friday the public prosecutor will commence investigations into the case. Some workers at the Yanacocha mine may feel GRUFIDES is putting their economic interests at risk, and executives at the Yanacocha mine can't be too pleased with the activists either. (A massive expansion project at the Yanacocha mine called 'Congas' was suspended this year due to widespread protests by farming communities and citizens.) Several officials at Yanacocha face charges pressed by GRUFIDES lawyers - led by Mirtha Vasquez - on behalf of farming communities affected by the mine.

At 4 pm on Sunday, the 16th of December, two young German documentary film makers had been detained by police forces contracted by Yanacocha in the area of the Blue Lake in the province of Celendin, where the suspended Congas project is located. The mine has enacted its own 'law' of blocking highways and impeding free transit in the area.

After the espionage, phone-taping and threats suffered by members of GRUFIDES during 'The Devil Operation' spy-ring, the Inter-American Human Rights Commission mandated that the Peruvian government must provide members of the non-profit with protection. The recent abuses suffered by GRUFIDES members prove that this protection has been ineffective and members blame the Peruvian government for failing to prevent these crimes.

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