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Why the latest proposal to solve the Las Bambas conflict won't fly

Bnamericas Published: Wednesday, November 09, 2022
Why the latest proposal to solve the Las Bambas conflict won't fly

A proposal to end the social conflict surrounding Las Bambas' US$8.3bn copper mine in Peru is not viable, according to a former official.

The Huancuire community is blocking progress, demanding its members become Las Bambas shareholders, since they will have to be resettled to make way for the Chalcobamba pit. But in 2013 Las Bambas already paid some 120mn soles (US$43mn at the time) for the land and an additional 100mn soles in 2017.

Talks have been extended into December, with the mines and energy ministry (Minem) mediating.

But the proposal isn’t viable since “having shares is not just being an owner and receiving profits: you have to invest, and the mining business is one of strong investments. You can have 10%, but if you don't invest, the stake will drop significantly,” Luis Miguel Incháusteguian independent director at Candente Copper and former energy and mines minister told BNamericas.

“Ten years ago, it was proposed to give shares of a project that had been starting in Puno. In the end, the community accepted the creation of a fund,” Incháustegui said. He added the community is probably not aiming to get shares, though. "What is really sought is to meet unsatisfied needs." 

Minem is creating opportunities for dialog and monitor commitments in the southern mining corridor. The ministry plans to extend these measures and gradually address similar problems. Las Bambas parent MMG has also committed to dialog to maintain operations.

The company recently reached an agreement with the Coyabamba community, which lifted a highway blockade, enabling transport of copper concentrate. MMG is also in talks with the Tuntuma and Huincho communities to lift other blockades. Talks with the Huancuire community are stalled, however.

Minem has been mediating in areas which host MMG operations, but has to reinforce efforts in the face of a new wave of conflicts that seems to be approaching.

A committee to monitor commitments between Las Bambas and the Pumamarca community also involves representatives of the ombudsman’s office and the national cabinet. Yet, it still has to permeate the entire region. “We are going to see quick solutions. They are not necessarily the most efficient, but we do see the government trying to solve it in the shortest time possible,” César Romero, head of research at Renta4 SAB, told BNamericas.

“I see the creation of a committee as positive. It is not something simple, but it is important to promote dialogue that has territorial development at the center. The ministry is seeking to have a greater role in the portfolio and solve it through dialog. I don't think the solution comes from anything else,” Incháustegui said.

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