Peru Copper Protests Flare Up Again

Peru Copper Protests Flare Up Again

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Story by Tania Mellado, REUTERS NEWS SERVICE

August 8, 2005

LIMA - After a brief truce, some 4,000 poor Peruvians on Friday resumed protests against a British-run copper project, blocking roads and marching to demand the company leave the site in northern Peru.

Monterrico Metals Plc hopes to start the Rio Blanco project, on Peru's border with Ecuador, in 2008, and says it will be the country's second-biggest copper mine.

Opponents say the project, expected to raise output by a quarter in the world's No. 3 copper producing nation, will endanger coffee crops, water supplies and farmland.

One man has died in the protests, which began more than a week ago and turned violent on Monday. The dispute appeared to have calmed down after a deal brokered by a local bishop on Wednesday.

Rio Blanco, hit by a similar protest last year, is located in the province of Piura but the nearest town is in the province of Cajamarca.

"We're restarting protests because the government promised dialogue in Piura and still hasn't delivered," Luis Chamba, a protest leader in the town of Ayabaca said by telephone.

"We'll fight until Monterrico goes," he added. Shouts of "farming yes, mining no" could be heard in the background.

Police and local officials said some 2,500 protesters were rallied in the square in Ayabaca, around 700 were in the town square in Huancabamba and some 800 people used tractors, trees and stones to block four roads leading to the mine site.

"We've got 500 police guarding the project but the people in Ayabaca are getting violent," regional police chief Gen. Ricardo Benavides said.

Monterrico, which has invested $20 million in exploration at the remote site and is conducting a feasibility study, says it remains committed to the project.

$1.1 BILLION AT RISK

The demonstration is the latest in a string of increasingly violent anti-mining protests in Peru that the private National Society of Mining, Energy and Petroleum says is putting investment worth more than $1.1 billion at risk.

Most protests are by people fearing farmland and water will be contaminated, and demanding more investment in roads, schools and hospitals in forgotten corners of the country.

Monterrico and the government say the Rio Blanco protest has been whipped up by left-wing radicals.

The trouble comes as Monterrico seeks partners for Rio Blanco, whose development costs are estimated to be around $800 million. Poland's KGHM Polska Miedz SA is considering taking at least 35 percent in the project.

Investors have been spooked before by protests against the most lucrative industry in this poor Andean country. Peru is the world's No. 3 zinc producer and No. 6. gold producer.

"Despite the deal that was signed (on Wednesday) we're not going to stop until we get the company out," Eliana Zavaleta, a protest leader in the town of San Igancio, told Reuters.

Peru has a history of mining contamination, which strict environmental standards imposed in the last decade have not been able to erase.

"In San Ignacio we produce 28 percent of Peru's coffee, we export and we have to keep quality high. Mining endangers this and in Piura contaminates the rivers that supply northern Peru," Zavaleta said.