As the global market for minerals slackens, Chile and Peru have agreed to work together to attract investment in their substantial copper resources.
Peru’s energy and mining minister, Jorge Merino, said the two countries could increase their proportion of global output from 40 to 50 percent and were therefore looking for “synergies, opportunities and threats to our markets”. The meeting came shortly after reports that investment and production were declining in both countries.
Chile’s Codelco, the world’s biggest copper producer, recently revealed that its plan to attract $100 billion of investment by 2020 was unlikely to be achieved. Peru’s investment target of $50 billion is also under threat, especially in light of continuing protests from local communities against the operations of the mining companies.
There have been delays in developing Peru’s gold and copper Conga project in the Andean region of Cajamarca, in which Newmont Mining is investing $4.8 billion. A state of emergency, declared following the deaths of several people in protests there, has now been lifted, but local communities remain concerned that the project will affect local water supplies. The Conga project involves building reservoirs to water that will be removed from existing lakes high in the Andes.
Xstrata’s Tintaya copper mine, near Cuzco, has also experienced social conflicts. In June, a burst pipeline caused toxic slurry to spill from the Antamina copper mine, jointly owned by BHP Billiton, Xstrata, Mitsubishi and other firms. More recently there was waste spillage from the Atacocha zinc mine, owned by Peruvian and Brazilian firms.
Peruvian President Ollanta Humala, elected to office last year, has promised to foster a new relationship between mining firms and local communities, but his administration has already faced more than 250 instances of conflict across the country. The government has now proposed doubling penalties for companies that cause pollution while mining minister Merino recently affirmed that the government is committed to improving dialogue.
