Peru struggles to improve its reputation over extractive projects

Published by MAC on 2013-12-28
Source: NACLA, WSJ, BN Americas, Mining.com

Peru: Police Abuse in the Pay of Mining Companies

Luis Manuel Claps

North American Congress on Latin America (http://nacla.org)

16 December 2013

Peru is a mining conflict country. In September of this year, the Defensoría del Pueblo (National Ombudsman Office) reported 223 social conflicts in September alone, with more than two thirds of them linked to minerals. The report also registers 196 dead and 2,369 injured in disputes over natural resources from 2006 to 2011. The database of the Latin American Observatory of Mining Conflicts (OCMAL) registers 34 cases across Peru. Even though the State has increased its presence in some mining areas and has its own Social Conflict Administration Office, the front line often becomes the ugliest side of corporate-community relations.

Hard Partners

A report published this month by Peruvian NGOs Grufides, Derechos Humanos Sin Fronteras (Human Rights without Borders), the Coordinadora Nacional de Derechos Humanos (National Coordinator for Human Rights, CNDDHH), and the Society for Threatened Peoples (STP) of Switzerland, revealed that mining corporations have signed agreements with the National Police to secure their assets. Titled "Police in the Pay of Mining Companies," the report examined the links between the police and mining corporations Antamina, Gold Fields, Sulliden Gold, Xstrata Tintaya, Minera Coimolache, and Yanacocha. These agreements allow them to request permanent police presence or ask for rapid deployment of larger units to prevent or repress social protests. In some cases, the companies provide full financial and logistical support: an incentive to use force.

Expanding Giant

The Switzerland-based commodities giant Glencore Xstrata owns the Tintaya mine and its expansion Antapaccay. Protesters in the province of Espinar have accused the company of causing pollution. As the protests grew, police moved in: three people were killed and around one hundred were injured. In a typical "knee jerk" reaction, the government of Ollanta Humala suspended freedom of assembly and imposed a state of emergency. What then? In an unusual display of force, the police arrested the mayor leading the protest against Xstrata. Dozens of riot police carrying plastic shields stormed the municipal building to pull Óscar Mollohuanca out.

Far away, indignant voters in the relaxed Swiss town of Hedingen decided to donate to charity some US$120,700 of taxes paid by Glencore Xstrata Chief Executive Ivan Glasenberg in protest against the commodities trader's business practices.

On the Payroll

Early this year, the report "Policía mercenaria" (mercenary police) released in April by the combative newspaper Hildebrandt en sus trece, reported that in normal conditions, mining companies pay around S/.48 a day (US$10) to the official in charge, and S/.28 a day (US$10) to sub officials, for providing protection to the corporation. In circumstances denoted as "special," the pay can be as high as S/.78 a day (US$28). Mar Pérez from the CNDDHH says that these agreements put all the responsibility for the repression of the protests in the hands of the police. "If someone dies," she notes, "it is much harder to investigate the crime."

Police corruption is not just a mining issue. In fact, it was one of the main issues in last week's Lima political agenda when a scandal broke out involving the police protection of Óscar Lopez Meneses, former intelligence officer under house arrest. Meneses was a member of the inner circle and in the 1990s was a close advisor to Vladimiro Montesinos, chief of intelligence under dictator Alberto Fujimori who is now serving a 25-year prison sentence. In response, José de Echave, Director of Lima-based NGO Cooperacción, wrote: "the fact that a fundamental body of the State such as the National Police should take the side of those who pay them, instead of the side of the public...reveals that it does not care about public interest in the least."

Keepers of the Lakes

The Conga mining project is located some 73 km northeast of the city of Cajamarca, in the discricts of Sorochuco and Huasmín. It has been the site of anti-mining protests for years. The U.S.-based Newmont Mining Corp. proposes to dig the Chailhuagón and Perol pits and at least two other additional areas. A plant with the capacity to process 92,000 tons of rock a day would produce 3.1 billion pounds of copper and 11.6 million ounces of gold in 20 years. However, the mineral content is very low: each ton contains less than 1 gram of gold and 0.2% of copper.

The Regional Government and the local communities denounced the serious impacts the project would have on the watersheds. To the complaints about the destruction of the Azul, Perol, Mala, and Chica Andean lakes, Minera Yanacocha replied that it would build three reservoirs to replace them. In July 2011, Denver-based Newmont Mining and its local partner Buenaventura publicly announced that they had approved funding for the project to the value of US$4800 million, one of the biggest mining investments in the history of Peru. In Cajamarca, the same mining companies have operated Yanacocha, the largest open-pit goldmine in South America, for the past 19 years.

But in November 2011, a massive strike forced them to suspend all activities. In December, Humala decreed a 60-day state of emergency in the provinces of Cajamarca, Hualgayoc, Celendín, and Contumazá. In the first days of July 2012, brutal police repression of demonstrators protesting to defend their lakes left a tragic toll of five dead and around 150 injured. In response, the communities have organized an admirable form of protests: the guardianes de las lagunas (keepers of the lakes).

Private Security Agencies

Luis Escarcena Ishikawa is the Securitas coordinator for Canadian corporation Hudbay Minerals. He was Alberto Fujimori´s aide-de-camp and one of the three pilots of the "narco-plane," the Peruvian Air Force detained minutes before leaving for Russia with 170 Kg (375lbs) of cocaine in May 1996. According to a report by IDL Reporteros, Fujimori himself exculpated Escarcena in a public speech in July 1997.

Hudbay bought Norsemont Mining and its Constancia copper project near the Tintaya mine in 2011. Some 40% of the construction of the mine has already been completed. Authorities of the Chamaca community have expressed their concerns about the project's "huge enviornmental impacts and reduced economic benefits." Tito Cruz Llacma, from the local organization Frente Único de Defensa de los Intereses de Chamaca (United Front in Defense of the Chamaca's Interests, FUDICH) stated that "it's going to be like Espinar, where cattle and agriculture have been affected by contamination of the rivers."

Congressional Investigation

Private security firm Forza was investigated in 2009, when a Congressional commission opened an inquiry into whether crimes were committed by the police and private security personnel in response to protests. Peruvian prosecutors accused the police of torturing protesters at the Rio Blanco mining camp in 2005, but cleared the security firm. At the time, Monterrico Metals operated the Rio Blanco project. When the scandal erupted, Forza's press office referred Reuters to Switzerland's Securitas, which later officially bought the Peruvian company in 2007. After the Monterrico affair, China's Zijin bought the project in 2007. Monterrico was sued by 33 of the victims in a UK court and in 2011 agreed to pay them compensation.

Surviving the Pierina Mine

On September 19, 2012 at 3:30 p.m., about 100 protesters from the Marinayoc Community, a close neighbor of Barrick Gold Corporation's Pierina gold and silver mine in Huaraz, gathered at the mine's main gate known as Bravo 22. They demanded that the Toronto-based gold miner fulfill its promise to provide the community with fresh and clean water, as the massive open pit and its infrastructure had destroyed their water sources. While they were protesting at the gate, the police sent by Barrick fired tear gas bombs. The protestors dispersed down the hill while being chased by shotguns. Nemesio Poma Rosales (55) was wounded and later died. Barrick released his body to the local morgue the next day in Jangas, the district capital. According to Lima-based newspaper La República, "Edith Poma denounced that her father Nemesio was taken alive to the mine medical post where he bled to death."

When the police started shooting, many of the protesters ran away. Alejandro Tomás Rosales Chávez (45) had made it some 20 steps down the hill when he was wounded in his back by bullet splinters. Alejandro was then taken to a clinic in Huaraz where, after three operations, the doctors saved his life. I took his testimony for this year's edition of Barrick Gold alternative annual report. A day after the violence at Pierina, Human Rights Watch issued an open letter to President Ollanta Humala expressing concern over the use of lethal force deployed during protests. Barrick financed the restoration of the house where César Vallejo, the canonical Latin American poet, spent his childhood. The stated goals of the project were to strengthen regional pride in the rich cultural heritage of La Libertad and to improve the local economy through an expansion of the tourist industry; the money came from the Lagunas Norte mine in La Libertad, located some 150 km from Pierina.

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Peru's $1bn Tia Maria copper mine gets social license, to restart mining soon

Cecilia Jamasmie

Mining.com

20 December 2013

US miner Southern Copper is likely to restart work at its controversial $1 billion Tía María copper project near Arequipa, Peru, within the next 90 days, a top government official said following a public meeting with local residents Friday.

Peru's Mines and Energy Minister, Jorge Merino, told Andina News agency (in Spanish) receiving support from the local community is "a big step forward," adding it shows that "dialogue and coordinated efforts from national, regional and local authorities can make megaprojects happen."

The proposed mine has faced ongoing opposition from anti-mining groups, but SCCO worked on reaching a compromise with locals, a key factor to obtain a social license to operate.

If the successful talks are followed by Tia Maria's resuming operations as expected, Peru's government expects investors to come back. "It will show we have made inroads to resolve conflicts that have delayed several mining projects in Peru over concerns by communities about their environmental impact," he was quoted as saying.

Peru's $1bn Tia Maria copper mine gets social license, to restart mining soonAlthough the production capacity of most countries has flat-lined in recent years, Latin America's clout in the copper industry has risen exponentially. Led by the likes of SCCO, Peru alone is expected to attract $15bn worth of copper mining projects between now and 2015. They, says the country's minister of energy, will increase Peru's overall copper production from 1.5 million tonnes to 2.8 million tonnes by the end of 2015.

The Phoenix-based mining company has the highest copper reserves of any publicity traded mining company worldwide and one of the best cash cost in the industry.

Established in 1952 and listed on the New York and Lima Stock Exchange's since 1996, SCCO is the largest single entity of Grupo Mexico, Mexico's No. 1 mining corporation and the sixth largest worldwide, accounting for 67% of the group's total sales.

Tía María is expected to generate 120,000 tons of copper a year.

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Southern Copper holds Tía María copper project hearing amidst protests

Alex Emery

Business News Americas

20 December 2013

Southern Copper, the largest producer of the metal in Peru and Mexico, held a public hearing for its delayed US$1bn Tía María copper project in Arequipa region late Thursday amidst heavy police protection from protesters.

Tía María project manager José Vargas and César Rodríguez, head of consultant firm Geoservice Ingeniería which conducted the project's environmental impact study, answered questions from some of the 1500 attendees at the two-and-a-half hour hearing in Arequipa region's province of Islay, Southern said in a statement. Abel Díaz and Marisa León, from the energy and mines ministry's (MEM) general mining environmental affairs department, also attended the hearing, the company said.

The Phoenix -based company, which said the hearing was held "without restrictions," also broadcast the event on local media and installed giant TV screens outside the premises. Opponents to mining also attended, the statement said.

The government sent 2000 police troops to the region to maintain order after protests in 2011 left five dead and led to the suspension of the project, according to Lima-based El Comercio. About 200 opponents held protest marches, battled police in the streets and threw chairs at those attending Thursday's meeting, injuring 10, the newspaper said.

As a result of the hearing, Southern Copper earned a social license for the project, which is due to start producing 120,000t/y copper by 2016 and create 7000 jobs, energy and mines minister Jorge Merino said. The government expects to approve the new EIS within 90 days and construction may start in the second quarter of 2014, he said.

"This approval is extremely important in terms of the law, so that the EIS can then be approved," Merino told state news agency Andina. "It's an example of how through dialogue and the shared effort of national and regional government, local authorities, civil society and the serious participation of mining companies, we can have new mega-projects."

The company sent the new EIS, which includes a desalination plant, to the ministry in November. The office of Southern Peru's CEO Óscar González Rocha did not immediately respond to a telephone call and an e-mail seeking comment.

The company is counting on projects including Tía María and a US$700mn Toquepala expansion to boost annual copper output to 1.2Mt by 2017. Southern Peru has forecast 640,000t copper production this year, with 20,000t of that coming from third-party concentrate purchases, before rising to 650,000t in 2014 and 859,000t in 2015.

Southern Copper, which is seeking approval of the Toquepala expansion project in Tacna region, has pledged 390mn soles (US$140mn) to the Tacna regional government to finance infrastructure and social projects such as a new hospital, Credicorp Capital mining analyst Héctor Collantes wrote in a report Friday.

The company's production of the metal dropped 4.6% to 451,957t through the third quarter, while silver fell 3.8% to 9,870kg. Zinc output climbed 13.4% to 75,518t and molybdenum rose 2% to 14,049t.

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Peru Expects Approval for Delayed Southern Copper Project

Company Says Environmental-Impact Study Appeased Local Residents

Ryan Dube

Wall Street Journal

20 December 2013

LIMA, Peru-Peru expects to approve a key environmental permit for the development of Southern Copper Corp.'s SCCO Tia Maria copper mine project within the next 90 days, a top government official said following a public meeting with local residents.

The development of Tia Maria will be an important signal to investors that the government has made inroads to resolve conflicts that have delayed several mining projects in Peru over concerns by communities about their environmental impact.

On Thursday, Southern Copper presented the project's environmental-impact study at a public hearing in Cocachacra, in Arequipa region. Such a hearing is an important step that mining companies need to fulfill before the government can approve their environmental permit.

Southern Copper said in a statement Friday that some 1500 people participated in the meeting. Mines and Energy Minister Jorge Merino said the company received its "social license" for Tia Maria as a majority of participants in the meeting supported the project.

"This was a big step forward," Mr. Merino said in a television interview. "We hope that in 90 days the environmental-impact study will be approved."

Mr. Merino said that construction at Tia Maria could begin in the second quarter of 2014.

Tia Maria was suspended in 2011 after violent protests prevented the company from holding its public hearing. Opponents of the project were worried that it would deplete the water supply for local agriculture. Three people were killed during those protests and several were injured.

Southern Copper has since reworked its environmental study and says that the new mine plan addresses community concerns. The company now plans to pump in water from the Pacific Ocean.

However, some residents have continued to oppose the project. On Thursday, hundreds of protesters clashed with riot police in Cocachacra on the streets outside of the public hearing.

The government and Southern Copper both said that opponents of Tia Maria are a minority in the community.

Tia Maria currently has a price tag of $1 billion, however Southern Copper Chief Executive Oscar Gonzalez Rocha said in September that the final capex could increase pending the approval of its environmental permit.

Tia Maria could produce 120,000 tons of copper per year.

Southern Copper, a major global producer of copper, operates mines and smelting and refining facilities in Mexico and Peru.

Grupo Mexico SAB has a controlling stake in Southern Copper.

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Illegal mining is Latin America's new cocaine

Cecilia Jamasmie

Mining.com

23 December 2013

Illegal mining has become the "new cocaine" of Latin America in terms of illicit trading, as countries such as Colombia, Peru, Ecuador, Venezuela and Bolivia, are said to be obtaining higher profits from the unlicensed activity than from drug trafficking. The ecological damage is even greater.

According to Chilean newspaper El Mercurio (in Spanish), the shady business in the Amazonic jungle of Peru is already generating 15% more profits than the country's total estimated drug trafficking. The figure is shocking, as Peru is said to already be the world's largest exporter of cocaine.

The latest study published by Peru's government last month, revealed that illicit gold extraction has led to violence, pollution and the destruction of parts of the country's precious rainforest- more than 50,000 hectares so far. The figure is significantly higher than the 18,000 ha authorities estimated last year.

What it's worse, unlawful mining has spread to surrounding countries such as Ecuador, Venezuela and Bolivia, which is intensifying the damage on the Amazon, as well in water sources, reports El Mercurio.

Terrorists in control

In Colombia the situation is even more complicated, with rebels and a new generation of drug gangs -known locally as "Bacrims"- increasingly turning to gold mining to finance their terrorist acts.

Since the Colombian government and Revolutionary Armed Forces of Colombia (FARC) began face-to-face peace talks in November 2012, those who live in the areas controlled by the rebels have been following the negotiations closely.

"Mining and forestry are controlled by the FARC and other criminal gangs," said Richard Moreno, a legal adviser to an NGO that advocates social development in the Choco department, known for its large Afro-Colombian population. "If you don't hand over extortion payments, you can't work there."

Neighbouring Venezuela is also seeing the clandestine practice flourish, knocking efforts by the government to check deforestation.

Foreign and local groups fighting for the rights of the Venezuela's indigenous inhabitants estimate that there are as many as 4,000 illegal miners working in the country near the borders with Colombia and Brazil, according to Reuters.

Ecuador is another country that has recently begun to feel the impacts of the illicit mining. Last month vice president Jorge Glas said the venture was growing scourge, a day after a violent confrontation between soldiers and miners in the Amazonian region of the country left one civilian dead and nine soldiers wounded.

Los Angeles Times reported the clash occurred after soldiers attempted to confiscate river dredges and dislodge mostly indigenous miners in the province of Morona Santiago, about 320 km southeast of Quito, the capital. Foreign mining concerns and small-scale miners, often without permits, have ramped up gold-mining projects in the region in recent years.

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Peru: Open letter on destructive mining in Latin America

http://www.indcatholicnews.com/news.php?viewStory=23759

6 December 2013

César Correa, the Justice Peace & Integrity Of Creation Co-ordinator in Chile for the Missionary Society of St Columban recently participated in a meeting on mining in Latin-America, held in Lima, Peru. The gathering involved Catholics concerned about this issue from throughout Latin America. The group produced the following declaration at the end of the meeting, amidst wide-spread concern about destructive mining in the continent.

We are religious and lay men and women from Latin America moved by the critical situation of our peoples vis-à-vis the extractive industry-they are impacted day after day by the destruction of Creation, by the indiscriminate exploitation of common goods, and by the repression and exclusion that causes social conflicts, infringes human rights, and destroys vital ecosystems. We seek to develop joint strategies to respond to this complex reality, illuminated by the Gospel.

In November 2013 we met in Lima as an exploratory group. This initiative emerged out of the concrete experiences of those who are working where there is conflict over extractive projects.

In Peru, which is the Latin American country with the best economic-development indicators, the Ombudsman's Office has reported that mining is the principle source of social conflict. In all of our countries extractivism is source of constant and serious conflicts.

A total of thirty people attended the meeting, from El Salvador, Honduras, Colombia, Ecuador, Peru, Chile, Argentina, Brazil, and also religious and lay representatives from international agencies including VIVAT International, Franciscans International, Mercy International (NGOs of different religious congregations at the UN) and the Justice, Peace, and Integrity of Creation office of the OFM Franciscans in Rome. The process was supported and accompanied by Misereor, the development agency of the Catholic Church in Germany.

In recent years, the Latin American Episcopal Council (CELAM), several dioceses and conferences of Catholic bishops, as well as the Latin American Council of Churches (CLAI) have explored and discussed the conflicts caused by large-scale mining and energy-related projects in our countries. Christian communities, in many cases, have played key roles in resisting these projects, in the defense of rights and local traditions and in search of alternatives to this developmentist and plundering model stemming from colonialism.

These grassroots Christian organizations felt the need to revive the network among themselves and the institutional Church in an ecumenical spirit.

The context is extremely challenging: Christian leaders pastors that defend communities, the environment, and workers from the impact of mining are increasingly criminalised and persecuted, they find themselves isolated and sometimes without the support of church institutions or the congregations to which they belong. Several catechists, sisters, priests and pastors have been murdered, threatened or removed from the communities with whom they lived and struggled.

Indigenous or traditional peoples are the most affected by large-scale extractive projects. They suffer negative health impacts; their traditional territories are devastated, their cultures and spiritualties are threatened. We are concerned about the attacks on the rights of indigenous people which have been so arduously earned over the last decades, under pressure from mining companies. Native peoples are not being respected in what concerns their right to veto the construction of large-scale hydroelectric or mineral exploration on the territories that belong to their ancestors.

Given this concerning panorama, there is a deep need to strengthen the alliances among those who have taken up the Christian mission to care for Creation, including strengthening the dialogue with the hierarchies of our churches. We were very happy to have the Brazilian bishop Monsignor Guilherme Werlang participating in the Lima meeting, as well as the support that Pope Francis expressed for the struggle against large-scale mining in a recent meeting in Rome. These are important signs for the future.

During this first meeting in Lima, we identified some shared work and strategies for the future:

We want to contribute to a biblical and theological re-reading of the fundamental principles of the Christian commitment to justice, peace and the integrity of creation (JPIC). We wish to deepen the relationship between the sacred values of the traditions of our peoples, the culture of ‘Buen Vivir' (Good Living) and the Christian message, in a common commitment to defend life. We will work to incorporate these themes in the popular education of Christian communities.

We want to dialogue with the institutional Catholic Church, with networks of evangelical churches, and with the leaders of our religious congregations. We will seek to strengthen our dialogue with CLAI and to promote a gathering for reflection and retreat in which representatives of the communities affected by mining may call on the Vatican to protect and defend their rights and ways of life.

We wish to build bridges among affected communities and international institutions working to defend human rights, via the mission of religious congregations working at the United Nations, the JPIC leadership at the national and international level, and in international networks in the struggle against the impacts of mining.

To this end, we invite religious men and women and lay leaders of Latin America who are conscious of this urgency and willing to commit to the defense of communities affected by mining to join in the ongoing discussion of these points.

We want to meet again in Brazil toward the end of 2014 to reaffirm these and new commitments, together with a larger and more connected group, so that our peoples feel the churches by their side and so that everything, in them, can have life in abundance.

Lima, November 4-5, 2013

Ofelia Vargas - Peru - Grufides
Pablo Sanchez - Peru - Grufides
Juan Goicochea - Peru - Comboni Missionaries
René Flores - Honduras - Franciscan Order of Friars Minor
César Espinoza - Honduras - Claretian Missionaries
Donald Hernandes - Honduras - CEPRODEH
Filomeno Ceja - Guatemala - Comboni Missionaries
Juan de La Cruz - Ecuador - Salesians
Dário Bossi - Brazil - Comboni Missionaries
Danilo Chammas - Brazil - Justiça nos Trilhos
Rodrigo Peret - Brazil - Franciscan Order of Friars Minor
Gilberto Pauwels - Bolivia - Oblates of Immaculate Mary
Adriel Ruiz - Colombia - Diocesan priest
Cesar Correa - Chile - Columban Missionaries
César Padilla - Chile - OCMAL