Mining in Peru: Unstoppable

peru mining

Finance Minister Alonso Segura said in an interview in 2015 that Peru is in good shape to weather the biggest flight of capital from emerging markets in a quarter century. It has foreign exchange reserves of more than $60 billion, or about 30 percent of gross domestic product.  With 2.4 percent growth forecast this year, the Peruvian economy will still easily outperform Latin America, whose overall output the IMF expects to shrink by 0.3 percent… What Peru lacks is both strong innovation and public institutions. The World Economic Forum ranks Peru in the bottom fifth globally in both.And so it remains heavily dependent on wooing mining investment with incentives including comparatively lax regulation.  In June 2014, Peru enacted a law further easing environmental rules.

Carlos Monge, Latin America director for the New York-based nonprofit Natural Resource Governance Institute, blames that law for triggering a protest last month in which four people were killed by police bullets at a $7.4 billion Chinese-owned copper mining project.  Protest leaders complained that Las Bambas’ mine owner, China Minmetals Corp., altered the project’s plans without local consent, eliminating plans for a mineral pipeline. Instead, instead crushed ore was to be trucked through communities, increasing contamination.  In May, 2015 five people were killed as farmers in a rice-growing valley mobilized against another copper-mining project, this one Mexican-owned.  In both disputes, the government declared states of emergency and suspended civil liberties locally.  Said Monge: “More conflicts is a very possible scenario, as the government is seeking mining projects at all costs.”

Excerpts from Celebration of Peru’s economic boom comes late, Associated Press, Oct. 9, 2015

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