PERU

PERU

Does Everything Have A Price?

By José De Echave, CNR

28th August 2007

Majaz Mines, now under ownership by Chinese investors, has decided to open a new chapter in the troublesome history of the Rio Blanco project in the Piura mountains of Perú. The company has put a price upon the communities of Yanta and Segunda y Cajas: The offer is some U$40 million for each of the communities, an amount which will be paid off in installments over 25 years.

The payment of money will of course be in exchange for a series of conditions to be imposed upon the communities as well as the Peruvian state. A million dollars if the communities decide to participate in the fund; two million more to each community who "ratifies" the use of their lands; another million when the Ministry of Mining and Energy approves the Environmental Impact Study; $500,000 during the construction; and a million and a half dollars for each year of production, as well as other conditions to be created.

Particularly noteworthy is the request for "ratification" of the permission of the communities. In reality, there is nothing to ratify: The company never has had the authorization of either community, as is required in Article 11 of the laws promoting private investments in the lands of campesino communities, requiring the approval of the general assembly with the vote of two-thirds of all of the members of the community.

The supposed "ratification" would serve to dodge the penal case against Majaz for the crime of illegal seizure of lands; the company is seeking as well to "fix" the legal observations that the very Public Registry has made regarding land access and water rights that only exist in the fantasy of the company's legal assessors.

It appears that the company believes that in Perú, everything has a price and that they are not interested in a discussion with the Peruvian people whether or not the Piura mountains will convert into a new mining district. In the face of a citizens consultation this coming September 16, the company has decided to play all its cards, trying to create a climate of uncertainty in both community with this type of offer. However, one of the problems that Majaz suffers is a total lack of credibility. Why would the people suddenly now believe a company which has lied repeatedly to both communities and to the Peruvian government? Moreover, especially with regards to promises that are to be met over the next twenty-five years?

Majaz Mines has decided to go shopping for consent: The communities are in charge of giving them their response.