MAC: Mines and Communities

Perú - Cañaris: The first mining conflict of the year?

Published by MAC on 2013-01-21
Source: Statement, Bloomberg (2013-01-18)

A serious conflict is likely to emerge in coming days over Toronto Stock Exchange listed Candente Copper Corp.

The Peruvian government authorities are saying that the community of San Juan de Cañaris in the northern department of Lambayeque, is being driven by political interests, instead of by their desire to safeguard local water supplies and agricultural activities from large scale mining.

There is no sign that the community will pull out before their deadline of Sunday 20th January, at which point the community has said they would reinitiate protests.

Cañaris: The first mining conflict of the year?

Cooperacción

17 January 2013

(Translation from original Spanish by Jen Moore)

An indefinite blockade has been announced for January 20th in the area of Cañaris, which formally represents the start of the first mining conflict of the year. The district of Cañaris is located in the province of Ferreñafe, in the region of Lambayeque, Peru.

The president of the Campesino Community of Cañaris, Santos Cristóbal Barrios, announced that around 4,000 community members made the decision to reinitiate protests against the Cañariaco project of the Canadian company Candente Copper.

What are the principal characteristics of the project and the area in which they are working?

The Cañariaco mining project, with a projected investment of 1.5 million dollars, aims to develop mining activities in the area of three deposits: Cañariaco North, Cañariaco South and Green Brook.

Cañariaco is described as a large scale copper deposit with 752.4 million tons at 0.45% grade copper, 0.07 g/t gold and 1.9 g/t silver (0.52% Cu). All of this adds up to 7,533 billion pounds of copper, 1.7 million ounces of gold and 45.2 million ounces of silver.

Also, the deposit contains 157.7 million tons of inferred resources with 1.434 billion pounts of copper in the deposit called Cañariaco North.

The population is divided among 38 hamlets and they perceive the project as a threat to their ecosystem in the area where there has been little mining activity in the past and where the prinicipal activity is agricultural. The central worry of the local population is that the cloud forests will disappear, that the headwaters of the Kañaris River will be contaminated, and that an estimated 33 thousand hectares of agricultural land will be affected. Also, the project is understood to be the beginning of large scale mining that will continue to expand onto other mining concessions.

The district of Cañaris includes a range of ecosystems: at the lowest altitudes, with a warmer climate, there is coffee, fruit and sugar cane production, while at intermediate and high altitudes (up to 3,800 meters above sea level) there is production of coffee, bean, barley, potato, wheat, quinoa and pasture.

The population of San Juan de Cañaris organized a citizen consultation process on September 30, 2012 during which 95% voted against the mining project. Following this, in the month of November, community authorities met in Lima with representatives of the Presidency of the Council of Ministers, the Ministry of Energy and Mines, and the Ministry of the Environment without significant results.

Discontent built up against in December when the community found out that the National Water Authority had granted a water permit to the company for its activities.

It is hoped that this conflict will be adequately dealt with by the relevant authorities and that an agreement can be reached that will respond to the central concerns of the population of Cañaris.


Candente Poised for Worst Week Since ‘08 on Protest: Lima Mover

By Alex Emery

Bloomberg

18 January 18 2013

Candente Copper Corp. (DNT), a Canadian mining exploration company with operations in Peru, headed for its biggest weekly drop in more than four years as community opposition delayed a recently restarted drilling project.

Shares fell 6.3 percent to 45 cents at 12:46 p.m. in Lima. The drop pushed the loss since Jan. 11 to 25 percent, the steepest weekly decline on a closing basis since November 2008.

Peru's Deputy Mining Minister Guillermo Shinno said Jan. 16 that political groups planned to "paralyze" the Canariaco deposit in the northern Andes. The company had resumed exploratory drilling Jan. 3 after reaching an accord with the local community of Kanaris whose protests over land rights had delayed the $1.5 billion project for a year.

"Investors don't know what to believe as no one knows who's in charge of the community," Jorge Ramirez, an analyst at Kallpa Securities SAB, said in a phone interview from Lima. "Someone has to come forth and clarify the situation, as things seem to be back to square one."

Candente Chief Executive Officer Joanne Freeze didn't immediately return a telephone call and an e-mail seeking comment.

The Vancouver-based company's Canadian-traded shares fell 8.3 percent to 44 cents, pushing the weekly drop to 27 percent.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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