Peru mining boom leaves highlanders behind

Published by MAC on 2014-06-09
Source: Associated Press

Peru mining boom leaves highlanders behind

Frank Bajak

Associated Press

7 June 2014

SAN ANTONIO DE JUPROG, Peru - The Marzano-Velasquez clan lived a simple, pastoral life on a mountain that turned out to hold the world's largest known copper-and-zinc deposit.

They didn't expect riches when they and dozens of other Quechua-speaking families sold out to an international mining consortium. But they did believe the open-pit Antamina mine would lift their long-neglected highlands district from poverty, provide steady jobs, decent health care and schools.

Maria Magdalena Velasquez, who could not read or write, signed away her family's land with a thumbprint in 1999. She and her kin looked on as hired hands dismantled their homes on windswept moorlands before trucking the families down to the adjacent valley - their sheep herds, fields of potatoes, oats and alfalfa abandoned.

"It was a disaster to see," said Luis Marzano, her eldest son, who was 27 years old at the time. "They burned the roofs and knocked down the walls."

Twenty years ago, this rugged, mineral-rich Andean nation bent over backward to attract multinational mining companies, and became Latin America's undisputed economic growth leader.

But the boom has been more of a curse for thousands of peasant families like the Marzanos, who saw the $49,000 they got for their land evaporate as they struggled to adjust to an uprooted life

While colossal copper, gold, lead, tin and silver pits helped Peru's economy more than double in size, the people in the rural highlands that they dominate have been largely left behind, battling one environmental disaster after another as expanding mines contaminated their water, air and livestock. Promises of steady work and modern benefits remain mostly unfulfilled.

Instead, across Peru's mine-pocked highlands, lax government regulation and frustration has led to a growing fury of protests. In 2012, security forces shot and killed eight people protesting against two of the country's biggest mining projects. In April, Peru counted 81 active environmental disputes between mines and neighboring communities, according to the national ombudsman's office.

Seven involve Antamina, including a tense standoff with villagers led by the Marzanos over what they consider the mine's continuing encroachment in a major expansion.

Antamina CEO Abraham Chahuan declined repeated requests for an interview. But at his industry's annual conference in September, he said, "Mining has brought back development, infrastructure, education and dignified work."

His employer, a consortium made up of Anglo-Australian BHP Billiton, Swiss-owned Glencore/Xstrata, Japan's Mitsubishi and Canada's Teck Resources Ltd., earned $1.4 billion in profits from Antamina in the year ending in June 2013.

Half the 30 percent tax on its profits is distributed in its host state. The district of San Marcos, where the mine is located, is the country's richest - receiving about $50 million a year in royalties. Yet it has no paved highways, no hospital, and no water treatment plant. Nearly one third of toddlers suffer from chronic malnutrition - double the national average.

Beset by graft, San Marcos has cycled through four mayors in four years. The three ex-mayors were charged with inflating public works contracts and giving jobs and kickbacks to relatives. The current mayor is under investigation for the same.

After his ouster for nepotism, one ex-mayor was arrested for allegedly trying to abscond with more than $100,000 in cash.

Two weeks ago, the current mayor was arrested in an SUV with $16,000 in cash whose origin he couldn't explain. He was freed almost immediately and, four days later, $1.4 million was reported stolen from city hall.

Antamina says it spent $314 million from 2007 to 2013 on infrastructure and "social inclusion" projects in the region - including in pre-natal and dental care, child nutrition and animal husbandry.

Asked why San Marcos residents nevertheless live so poorly, company spokesman Martin Calderon suggested such questions be "directed at the authorities, be they national or regional."

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World Bank guidelines established in the 1990s stipulate that in big mining projects such as Antamina, whose initial owners had loans guaranteed by the bank, the people relocated should end up with equal or better living standards.

But that didn't happen to the Marzanos or their neighbors. The poverty rate in Peru's mining-scarred highlands remains above 50 percent, double the national average.

Of the Marzano's nine children, only Luis works at the mine. All are fighting Antamina's expansion.

On the edge of Antamina's nearly half mile-deep pit, blasts hurl skyward a blood-orange dust that laces the village of Juprog's fields with heavy metals, contaminating people, crops and livestock.

"It penetrates your skin, like ashes from a wood fire," says Lidia Zorilla, a 34-year-old farmer. She sorted potatoes as a dust cloud wafted toward her over a ridge separating the mine from a cluster of red-tiled homes and unfinished latrines.

The cloud paints the sky ochre and mingles with billows of cumulous that drift toward the glacier-strewn Cordillera Blanca range, a favorite of mountaineers.

Antamina's land and resettlement director, Mirko Chang, said the dust cloud is not toxic.

"It's earth, just the same as anywhere else," he said. He said Antamina carefully monitors the air quality - but declined to release those test results. A 2007 environmental impact statement for Antamina's mine expansion said an anticipated purchase of three square miles of Juprog village would necessitate resettling some families due to the "impact on air quality."

Villagers say the dust makes them sick.

"We always wake up with coughs, with headaches, chest pains," says Pedro Cotrina, a 51-year-old potato farmer. His wife and son were among villagers with unacceptably high levels of lead in their blood, documented in tests taken from 2006 to 2009.

Requested by villagers, the tests by government health agencies found elevated levels of lead and cadmium in people's blood and urine and heavy metals exceeding international standards on their kitchen floors and shelves, and in the livers of their sheep. Cadmium is a known human carcinogen while lead is toxic to almost every organ in the human body, according to the U.S. Agency for Toxic Substances and Disease Registry.

Lead levels measured in 2006 exceeded concentrations deemed acceptable by the U.S. Centers for Disease Control in 20 of 74 villagers, including nine children. More than half of the 82 adults and children tested had cadmium levels exceeding acceptable CDC limits.

The polymetal mine - Antamina also produces silver, molybdenum, lead and bismuth - completed a $1.5 billion upgrade in milling capacity two years ago that its CEO says has boosted production by 38 percent and will keep it open until 2029.

As its pit widens, villagers fear more contamination. While public health advocates say the government should protect the villagers and clean up, government health officials have recommended more studies - and removing metal-laden dust from homes.

Antamina acknowledged the dust complaints in its 2010 Sustainability Report but said it complied "100 percent" with air quality standards.

Health Ministry officials, meanwhile, did not respond to repeated requests to discuss the results, which the AP obtained through a freedom-of-information request and from lawyers for Juprog residents. Peruvian public officials rarely discuss problems at major mines.

In 2010, a regional prosecutor threw out an attempt to initiate criminal proceedings against Antamina based on the health studies, saying in a written opinion that it was "not possible to determine the source."

In fact, no lawsuits of significance related to pollution or public health have been successfully waged against big mining in Peru, lawyers say.

Raquel Yrigoyen, a lawyer who has represented Juprog villagers pro bono, said "you won't find (cases) against big companies that systematically pollute - that endanger public health."

Environmentalists say they can't get a fair hearing in Peru, so they take their cases abroad. One such case ended in an out-of-court settlement in Denver, Colorado, when Newmont Mining Corp., majority owner of the Yanacocha gold mine, paid an undisclosed sum to townspeople poisoned by mercury in a 2000 spill.

President Ollanta Humala said he found the contamination claims against Antamina hard to believe, since it would not make sense for big multinational companies to risk "acting irresponsibly."

"They would have a lot to lose because Peruvian laws are very strict these days for mining companies that contaminate the environment," he told The Associated Press in September.

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In neighboring Chile, environmentalists were heartened last year by a rare victory: After regulators discovered polluted water downstream of an $8.5 billion gold mine known as Pascua Lama, construction was suspended. The company had been ordered to protect groundwater and three nearby glaciers.

Mining companies have not faced anything like that kind of regulation in Peru, which didn't even have an environment ministry until 2008. Today, the Mining Ministry is still in charge of approving environmental impact studies, which are drafted by private contractors hired by mining companies.

Peru's environmental protection agency, OEFA, had a $19 million budget last year, though no lab for independent testing in a nation with 300 major mines. To date, it has levied fines of $487,200 against Antamina, of which the consortium has paid $85,700. It is appealing the rest.

Antamina's largest fine was levied after a waste pond leaked unacceptably high levels of copper, zinc and lead into the Juprog river in June 2009. Three years later, it was fined $392,000 - and Antamina is challenging it.

The agency inherited management of more than 7,500 mining waste sites that the World Bank says will cost $250 million to clean up by conservative estimates. The mines are supposed to pay for cleanup costs. But on the list, the polluter is almost never identified - the case for 60 sites fully or partially owned by Antamina.

Juprog's inhabitants aren't the only Andean villagers lacking faith in regulators. In July 2012, a 190-mile pipeline that carries zinc and copper slurry from Antamina to a Pacific port sprang a leak in the mountain town of Santa Rosa de Cajacay. A toxic mist sickened dozens - some were hospitalized for days. Environment Minister Manuel Pulgar-Vidal called for the maximum fine at the time: $14 million. A year later, he announced fines totaling just $77,000.

Enraged villagers dug up a 100-meter section of the pipeline and partially cut the fiber optic cable that controlled its flow.

"We don't care if we hurt Antamina economically," said community leader Hilario Moran. "We're sick of this."

The villagers' ire was aggravated by the withholding of results of a state health study conducted three months after the spill. Published after the newspaper La Republica filed a freedom-of-information request, the study showed that 25 percent of residents had unacceptably high levels of copper in their blood.

Reform from within has proven frustrating.

Ernesto Bustamante was director-general of environmental affairs at the Mining Ministry for four months in 2011. The Johns Hopkins Medical School graduate had hoped to use his molecular biologist expertise to devise ways of chemically dissolving contaminants.

Instead, he discovered that ministry officials have "little interest in remediation or in protecting the environment."

Bustamante said mining company employees routinely sneaked into the ministry with flash drives and helped government workers edit environmental impact studies.

He said he twice discovered, using Google Earth, that major mining companies had proceeded with environmentally sensitive expansion projects before applying for the necessary permits.

Bustamante suspected many ministry workers were on the take.

"Technicians who made a little more than $1,000 a month were taking vacations in Paris."

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In late 2011, a clutch of mostly young Marzano-Velasquez cousins opted to resist the mine's steady creep toward the village. They said it was poisoning land that they and other families communally own.

They built straw shacks near the edge of the pit, where gargantuan trucks haul blast-loosened rock day and night that is pulverized and then transported by a conveyor belt to a milling plant nearly two miles away.

The cousins took to occupying the shacks in shifts, but the mine blasts are now so near that they race uphill when the warning sirens that precede explosions go off.

Each side accuses the other of trespassing, and a knot of lawsuits and criminal complaints has heightened resentments. Antamina says the expansion is limited to land it owns, and that clan members have sabotaged mining machinery. Clan members say police working for the mine have illegally detained them. A judge weighing the eviction dispute is likely to decide the issue soon.

While a ruling against the protesters is unlikely to dampen their resolve, family elders have lost all hope.

Sabina Chavez, 64, curses the day her sister sold the family land.

"We were deceived," she said through tears. "They haven't given us a thing."billi