Anglo American optimistic on its $3 billion Peru copper project
Despite the recent deadly and divisive disputes over mining projects in Peru, London-based mining giant Anglo American (LON:AAL) says it hopes to begin construction of its $3 billion Quellaveco copper project in the country as soon as possible.
Anglo’s general manager in Peru, Luis Marchese, said on Monday his company is awaiting construction permits from the government to proceed with Quellaveco, located in the region of Moquegua, in Peru’s southwest, reported local radio station Pachamama.
If developed, Quellaveco would produce 220,000 tonnes of copper per year, or about a fifth of what Peru produced in 2011. The construction of the copper mine would take about 44 months.
Quellaveco was approved years ago, but construction was postponed because of community opposition. A key issue has been water access by the local community, as farmers fear the company will pollute lakes or use up scarce water resources they need for their crops.
Marchese noted, however, that a series of agreements have been reached on water issues, with local residents. Anglo is now trying to reach deals on contributions to the community for social and other programs.
"We are in the dialogue process,” Marchese told Reuters, adding the company is seeking the relevant permits and hope they can be obtained very soon.
Despite Anglo's optimism, the company is likely to still find strong opposition to its project.
Over the weekend, protests against Newmont Mining's Conga project in the Cajamarca region got uglier, with at least five journalists attacked and injured during funerals held on Saturday.
Last month, Peruvian authorities also met with representatives of the town of Espinar in southern Peru, to resolve a conflict between the community and Xstrata’s Tintaya copper mine, which they accuse of polluting their land and water supplies.
All over the country, underprivileged residents claim they don’t see the benefits of the country's mining profits coming from foreign firms.
$50 billion jeopardized
When Peru’s President Ollanta Humala was elected a year ago, he promised to solve the ongoing disputes among mining companies, the government and local communities. But the conflicts, which left 190 people dead during the preceding administration, continue to outshine the potential benefits that mining investment can bring to the country.
The $50 billion in investments forecasted for the next five years, according to most analysts, is starting to fall.
Canada’s Scotiabank states that, of the projects that account for over 85% of the planned spending in the Peruvian mining industry, 11 face social struggles.
Peru is the world's second biggest producer of copper and silver and a major producer of gold, zinc and lead. The country’s extractive sector accounts for 60% of the economy.
Anglo American operates the Collahuasi mine in neighbouring Chile, the world's top copper producer, with Xstrata. It is also trying to settle a multimillion-dollar dispute with Chile's state-run Codelco.
With the contribution of Suzanne Soto, owner of Si! Corporate Communications, a Greater Toronto Area company providing public relations services in both English and Spanish.