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Peruvian Voters Favor Anti-Mining Candidates in at Least Three Regional Elections

Published by MAC on 2014-10-11
Source: Dow Jones

Peruvian Voters Favor Anti-Mining Candidates in at Least Three Regional Elections

Robert Kozak

Dow Jones Business News

6 October 2014

LIMA, Peru--Peruvians on Sunday showed strong support in at least three regional elections for candidates who promised to be tougher on large-scale mining projects, putting investments in that sector at risk, political analysts said.

Peru is a global leader in mining for gold, silver, copper and zinc, although protests over the past few years against some large-scale mining projects have slowed their development. Some politicians have used opposition to foreign-owned mining projects to gain support in their campaigns for elected office.

"There are various places where the candidates clearly supported anti-mining positions, especially in [the northern region of] Cajamarca, where the opposition to mining by the winning candidate was quite clear, " said Guillermo Loli, director of polling for Ipsos in Peru.

In the elections Sunday, Peruvians voted for 25 regional presidents, who are akin to governors in the U.S. They also voted for thousands of mayors and other elected officials.

In Cajamarca, about $9 billion in mining investments are on the drawing board, including about $5 billion in the giant copper and gold project known as Minas Conga.

There, regional president Gregorio Santos appears headed for re-election.

Mr. Santos led protests against Minas Conga, saying it would hurt water supplies. U.S.-based Newmont Mining Corp., which hoped to mine the minerals, said water supplies wouldn't be affected and that it has built dams to ensure that water supplies are available for the full year instead of just in the rainy season.

Official results, with 63% of the votes counted on Monday, showed 44% support for Mr. Santos in his re-election bid for regional president, compared with 22% for the nearest competitor, a trend that election officials say is unlikely to be reversed.

Mr. Santos's apparent re-election for a second term comes despite corruption charges that have led to his being jailed in a maximum-security facility while investigations continue. Some political analysts say the jailing may have helped create sympathy for Mr. Santos.

Mr. Santos's vice president, Porfirio Mendoza, is expected to take the post until the legal picture becomes clearer, according to party officials. The Movement for Social Affirmation party, run by Mr. Santos, remains unchanged in its opposition to the Minas Conga project.

"The position of Mr. Santos and the MAS party is that Minas Conga is inviable," said MAS spokesman Segundo Matta in a telephone interview.

Newmont Mining has run the giant Yanacocha gold mine in Cajamarca for about 20 years, although production is flagging there and the company wants to open the Minas Conga deposits that are adjacent to the existing mine.

Political analysts say that benefits of the Yanacocha mine haven't been felt in the region, a poor, mainly agricultural area. That has led to opposition to the Minas Conga project.

"The vote in Cajamarca was a type of referendum on the Minas Conga project, and it showed there is a clear, strong rejection of it," said environmental activist Marco Arana, who has also led protests against the project.

Industry officials said they would try to work with Mr. Santos, a former teacher and communist party member.

"It is a decision of the majority of the population in Cajamarca, and we will have to see how we can talk with Mr. Santos in order to help develop Cajamarca," said Jose Miguel Morales, a director of the industry group the National Society of Mining, Petroleum and Energy.

Officials at Newmont Mining had no comment.

Anti-mining candidates also received strong support in some other regions.

In the southern region of Puno, anti-mining candidate Walter Aduviri had 21% of the vote, enough for second place. A runoff vote will take place there, where about $2.6 billion in mining projects are on the drawing board.

In the southern region of Apurímac, there are about $12.7 billion in mining projects under development. The leading candidate, with 27% of the vote, Michael Martinez, has promised to take a tougher stance against mining projects. A runoff vote will also take place there as well.

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