Peru’s 13-year economic expansion is attributed largely to the country’s mining resources. High prices for precious metals have sent export earnings soaring and pushed growth rates to historic highs. Over the next decade, $50 billion in new mining investments are planned. So far, only 10 to 12 percent of the potential mining area has been explored. The inflow of multi-billion dollar investments has given transnational mining companies a huge influence over the country’s future. But the rewards from mining are not permanent as most mines last only about 20 years.
Mining has also become a threat to Peru’s water sources and may threaten future agricultural development and permanently damage life in the Andes.
Increasingly, Peru’s social organizations are saying that water must take precedence over mining. In the last year, their protests have temporarily halted a number of mining projects because of the negative effects on water availability, including Southern Copper’s $1 billion Tia Maria copper mine project near Arequipa; Bear Creek Mining Corp. of Canada’s Santa Ana $51 million silver mine, Puno; and Southern Copper’s $800 million expansion of the Toquepala copper mine, Tacna.
The February 9 March of the Water protest—mostly peasant farmers from the Andes region—wrapped up a month-long march from the mining region of Cajamarca to Lima where they presented a legal project aimed at banning mining in water source areas. Peru’s pro-water movement is also demanding tougher government control over mining and the implementation of effective public consultation procedures. A new public consultation law, passed last year, has yet to be implemented and protesters want new mine activities to wait until the law is in force. They also want a review of current mining concessions.
Over the years, the rights of local Andean communities have been trampled by centralized project approval and less than adequate environmental enforcement. Those living in Peru’s mining areas are among Peru’s poorest. After 20 years of unregulated mining growth there has been little change in the rates of poverty, nutrition and illiteracy in mining areas where the local population must also suffer the health effects from cyanide and mercury pollution.
During a recent Congressional Forum titled “Water, Biodiversity and Mining,” Congressperson Jorge Rimarachin Cabrera, representing Cajamarca, called for a reorientation of Peru’s economy away from raw material exports. In 2011, mineral exports totaled $27.4 billion, accounting for 59 percent of Peru’s total export earnings of $46.3 billion.
President Alberto Fujimori (1990-2000) privatized Peru’s mining industry in the early 1990s, opening the way for new mining concessions under extremely favorable conditions. Companies pay a 30 percent income tax on their profits, but because of tax deductions, the resulting income is meager. And tax stabilization accords allow corporations to block future government tax increases for periods of 10 to 15 years. (The tax breaks are guaranteed by the Peruvian constitution.)
Fujimori-Era Mining Laws Under Attack
The Fujimori-era mining program soon put Peru on the mining investment hot list. Mines now cover 25 million hectares (61.7 million acres) of land in Peru and projects have expanded out of the Andean mountains to Peru’s coast and into the Amazon jungle. Critics say the growth of the mining industry has been chaotic and disorganized, while government regulation has been weak. Sergio Sanchez of the nongovernmental organization GRUFIDES, which has been analyzing the mining situation in Peru for many years, stresses that changes are long overdue: “If you realize what’s going on in Peru, the legal framework has been overwhelmed. It can’t continue. The mining law can’t continue, the water resource law can’t continue.”
Plans to put Peru’s largest foreign investment ever—the $4.8 billion Conga gold and copper mine, in northern Peru’s Cajamarca region—has brought the mining conflict to Peru’s new president, Ollanta Humala, who campaigned as a leftist likely to take on mining interests once elected, but compromised his policies by agreeing to a more neoliberal road map.
Anger at Humala’s flip-flop on mining has become a factor in rising tensions in Cajamarca Department, a historically conflicted mining region of 1.4 million. Some 47 percent of Cajamarca area has been concessioned for mining development.
Communities in Cajamarca have a history of disputes with area mining projects. In 2004, a protest by area peasant farmers and students halted a similar project by the same corporations at Cerro Quilish, which would have affected the water supply for the city of Cajamarca.
The Conga open pit mine will destroy four high altitude Andean lakes and replace them with reservoirs. Earth from the mine project will be dumped into two of the destroyed natural lakes. Critics of the project contend the mine will have effects on the entire water system in the area. The project is located in the headwaters region of five rivers.
Social organizations mobilizing to oppose Conga vow that it will never go forward. The first protests broke out in November 2011. On November 29, 19 persons were shot and injured. The government ordered a temporary halt to construction of the mine, but efforts to halt the protest through dialogue failed.
Peru’s Left Confronts The President They Elected
The inability of the Humala cabinet to agree on whether to impose a state of emergency led to the resignation of half the president’s cabinet in December 2011. Humala accepted the resignation of his former campaign manager and head of the cabinet, Solomon Lerner, and quickly appointed former Lieutenant Colonel Oscar Valdes, who was serving as Interior Minister.
The dispute resulted in the ejection of leftist participants in the cabinet. Participation by Alejandro Toledo’s moderate Peru Possible Party also ended. Toledo then criticized the increased influence of former military people in the new cabinet.
Without a doubt Peru’s left feels betrayed by a president they worked to elect. Gonzales stressed that tensions in the cabinet were evident from the first days of the new government. Conservative business and media sectors were pressing to maintain continuity in economic and investment policies. “Conga was the trigger that caused the conservative sectors to gain power and as a consequence those that supported change lost.”
Humala imposed a state of emergency and sent in troops in December, which ended the protest. He then announced a plan to have international experts study the water and ecological impact of the project and ways to implement it with changes aimed at reducing any negative impacts. A team of three international geological and mining experts from Spain and Portugal had until early April to complete a study of the project.
Cajamarca’s regional governor, Gregorio Santos, is at the head of efforts to have Conga halted. He has issued an ordinance, passed by the regional council on December 5, which bans all mining in Cajamarca water source areas. Santos, area mayors, and other protest groups fighting Conga have rejected the central government’s international study as just another means of justifying the mine, citing two independent reports as having found the project flawed and likely to damage the region.
The dispute has centered on whether the Newmont Corporation’s environmental impact report accurately assessed the impacts of the mine on surface and underground water sources.
Conga Environmental Impact Report Slammed
Soon after protests broke out in November, members of the Environmental Ministry pulled Newmont’s environmental impact statement from the pile and reviewed it—the impact report had been submitted in January 2010 and approved in October 2010 by the Ministry of Energy and Mines. This was a faster timeline than the usual two-and-a-half years for most impact statements.
The review of the environmental impact report was carried out by Assistant Environmental Minister Jose de Echave, who had joined the new government after working for the environmental non-governmental organization COOPACCION. The analysis termed Newmont’s environmental report highly “subjective” and called for further study. The Conga environmental report said the impact of the project would be “very low to moderate,” but the review said that the size of the project, its location at the head of a water basin, and the fragile ecosystem make it “very unlikely that the environmental impact could be classified in the range of very low to moderate.”
A study released in March by the non-governmental organization GRUFIDES and the University of Cajamarca, which was prepared by American Geologist Robert E. Moran, went even farther in criticizing the Conga Environmental Impact report.
“The Conga EIA (Environmental Impact Report) is a surprisingly poor and disingenuous document given the scale of the investment—$4.8 Billion—and the involvement of several major corporations,” Moran said. Moran stressed that the report failed to provide technical information necessary for the public and regulators to make adequately informed decisions. “In many ways,” Moran said, “it is an insult to the public and regulators.”
The government dismissed Moran’s report as politicized. Newmont Regional Vice President for South America, Carlos Santa Cruz, said at a recent press conference that the company would expend its “last drop of sweat” to put the mine into operation. Newmont contends its design will produce more water for agriculture than the existing natural lakes. It said it has consulted 13,000 Cajamarca residents regarding the project. It defends its environmental report as meeting the government’s requirements.
Those opposing the mine are confident that the Moran and De Echave reports prove Conga is not viable. As the date of release of the government’s study approached, Cajamarca mobilized new protests. At the March 9 protest in Cajamarca. Santos told the crowd that the president’s conservative policies had let down those who had backed his original political project. “Because now that he has given himself over into the arms of the Right, Ollanta Humala is doing very well in the polls. Now he has 80 percent support in Miraflores, in San Borja,” Santos said, mentioning Lima’s rich neighborhoods.
Valdes has called the protesters “pseudo environmentalists” and the central government is challenging Cajamarca’s regional ordinance before Peru’s Constitutional Court. It has sent a team of prosecutors to investigate the finances of the regional government hoping to prove that Santos used government funds to finance recent protests.
Avoiding a serious confrontation over Conga will not be easy. “If Conga goes ahead no matter what, it’s going to require that the national government impose it with force through the military,” Sanchez said. “There won’t be any other way. Because the population of Cajamarca will go into the streets and reject the project. The position of Cajamarca is clear, the mobilizations have clearly been against this project. Conga really doesn’t have social support. It may have approval on paper, but it doesn’t have social approval.”
Ronald J. Morgan is a journalist.