Why Peruvian mining will continue to face serious social conflicts

Social conflicts have been a constant thorn in the side of mining activities in Peru, with many companies being forced to halt operations to resolve them, and the agreements they reach are not always kept.

The first year of President Pedro Castillo's administration has been wracked with mining protests, community demands for better distribution of income, private sector demands for a clear roadmap to address the various problems and a great deal of uncertainty, not to mention the constant clashes between the executive and legislative branches of government. 

According to the latest report on social conflicts from the national ombudsman's office, of the 102 socio-environmental conflicts currently underway, 67 are related to mining. 

Las Bambas, which was forced to halt operations for more than 50 days earlier this year, did eventually resume activities and even signed an agreement with a community company, but the conflict was difficult to unravel to resolve. 

Likewise, in recent weeks there have been blockades at Espinar in Cusco region, where local people are demanding money from Glencore Antapaccay, and also at the San Gerardo mine run by Nexa Resources unit Atacocha in Pasco region.

BNamericas speaks with Richard Arce, a former congressman for the Apurímac region, to find out more about the conflicts, the importance of identifying the needs of each community and not generalizing them, the government's mistakes in trying to resolve tensions and the outlook for the coming weeks.

BNamericas: What is the situation in the southern mining corridor (CMS) at the moment? What's happening with Las Bambas?

Arce: There's a 'standby', but there's no agreement. In short, they've gone back to the drawing board to reach a 'truce'. There are round tables for each sector, but it's complex and has to be analyzed.

The southern mining corridor is more than 200km, where there are lots of communities and each of them has its own problems. It starts in the province of Cotabambas [Apurímac], then goes through the provinces of Chumbivilcas and Espinar [both in Cusco], and then to Pillones [Arequipa] and to the port of Matarani.

In the case of Cotabambas, where Las Bambas is located, what the government did was to put six communities into a single group, including the Fuerabamba community, which was a very serious mistake.

BNamericas: What is the difficulty with Fuerabamba?

Arce: Fuerabamba is a peasant community that was resettled which has a series of benefits that other communities will never have. They're given special treatment. An error, however, was that the State had to participate in these negotiations to prevent external actors from taking advantage.

We also have the case of the Huancuire community, where the new Las Bambas pit [Chalcobamba] is located. The agreement was reached between 2012 and 2013, and the company eventually bought the land. The problem came later when people realized that the land was worth more than the amounts which were paid. Legally these are already part of the company, which even has it in public records.

So we have two communities here – one resettled and another in process – that require special treatment. The problem is that the government has joined them with others that also handed over their land but for other issues. This is how conflicts have been unleashed between them.

BNamericas: Those are the Chila and Choajere communities?

Arce: Yes. Both handed over their land for the relocation of Fuerabamba [Nueva Fuerabamba] and claim that they were paid very little. The problem was in the formal transfer in the registration of public records, which is a whole series of procedures and was only concluded in 2020.

It's here where the conflict worsens and the aforementioned communities demand that Fuerabamba leave their land. This is what's forcing Fuerabamba to return to the area they ceded – the current operation of Las Bambas – and led to the last stoppage.

It's ironic that in Nueva Fuerabamba a very good school was built [operated by the company], and those from Chila and Choajere asked for their children to study there. Those from Fuerabamba said no. These details are very important for the government to be aware of when dealing with the problem.

BNamericas: Did not knowing those details aggravate the situation?  

Arce: Yes. When you get to know the actors and put yourself in the context, you better identify the expectations of each group. What the government did was appoint irresponsible people who are unaware of this reality. 

I've seen mismanagement from the vice ministry of governance, despite having the budget, professionals and everything necessary to support the process. If you don't consider these details of the conflict and you put them all 'in the same bag', it leads to nothing. All this is only the case of Cotabambas.

BNamericas: What lies ahead in the short term?

Arce: Give it two or three weeks and there will be lockouts and stoppages again. The talks have been a failure and the State believes that by talking with the mayors it will solve the problems of the communities. Although the State says that it will give more money to the authorities, the people have other types of demands.

There's also the problem of the Defense Front [civil society group Front for the Defense and Development of Apurímac] that is demanding a Framework Agreement that isn't being addressed for all of Cotabambas. It has nothing to do with the six communities currently in the talks – it's a claim from the rest.

BNamericas: What should the State's plan? How can they stop the problems?

Arce: The State has already messed up. There's an important detail here. President Pedro Castillo offered to nationalize the mines, and so far this year he hasn't gone to the corridor. High expectations have been generated and they aren't being met. This makes people feel frustrated and predisposed to conflict.

Apurímac loses around US$1.4mn per day due to the loss of canon and royalty payments every time operations are halted.

BNamericas: Is it time to be sincere about the situation and lower expectations?

Arce: Exactly. What we have to do is look at things case by case. I know it's endless, but there's no other way. Everything starts from the sincerity of the presidency of the council of ministers. The vice ministry of governance, the energy and mines ministry and the environment ministry are key. Coordinated work between all three is needed.

Conflict is a complex issue and you'll always live with it. When I hear someone say they're going to fix it, I think they're wrong. The strategy is to work to see how to make it sustainable, something that's not happening.

BNamericas: And the companies?

Arce: They have to understand that their way of relating [to communities] has failed. The communities aren't opposed to the mine. What they want is active participation and real benefits.

In the face of solutions, constitution of a social fund was proposed – that includes the provinces of Cotabambas, Chumbivilcas and Espinar – and they want be partners of a toll company to generate income.

BNamericas: Active participation such as transport outsourcing in the case of Las Bambas?

Maple: Yes, but the company has negotiated with certain community members. Although Fuerabamba has been the main one in the area, the rest are envious because they're almost like brothers. It's very complex.

The situation is difficult, but it seems that MMG/Las Bambas is playing for its future there. I was surprised by the statement of the Chinese embassy some time ago. At the time [2016], I delivered a letter to President Xi Ping denouncing what was happening in Las Bambas. Now there's more interest.