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Peruvian government suspends Southern’s construction licence for Tía María project

Peru’s minister of energy and mines, Francisco Ismodes. Photo from the Ministry’s Twitter account.

The Peruvian Ministry of Energy and Mines has temporarily suspended a construction licence given to Southern Copper (NYSE:SCCO) for its $1.4-billion Tía María copper project, located in the southern Islay province of the Arequipa region.

In an official communiqué, the ministry’s Mining Council explained that the decision is based on a request made on July 19, 2019, by the regional government of Arequipa, the Association of Workers of the Chucarapi Pampa Blanca Sugar Processing Plant, and the Board of the Valle del Tambo residents, to review Southern’s project. Such a review has to be carried out within the next four months.

According to the petitioners, a review is needed because the Tía María site sits on a protected area known as the ‘Lomas de Cachendo’ ecosystem, where extractive operations should be forbidden.

In an interview with local TV station Canal N, the minister of energy and mines, Francisco Ismodes, said that the suspension buys his office some time to be able to sit down with regional authorities and other stakeholders to discuss joint mechanisms that allow mining projects to go forward while respecting the environment.

Since the second week of July, residents of Valle del Tambo, the closest town to the Tía María site, have been protesting and carrying out a general strike as a way to express their rejection of the project. They have been joined by a number of regional unions.

This is not the first time Southern Copper, a subsidiary of Grupo Mexico, experiences a setback related to Tía María.

The construction plan has been halted and readjusted twice since it first came up, around 2010, due to fierce opposition by locals who are worried about its environmental impacts and the possibility of an open-pit mine damaging crops.

Southern executives, however, are hopeful that the project will be developed by 2020. Once completed, the mine is expected to produce 120,000 tonnes of copper a year for an estimated 20-year lifespan.