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PERU: My Mining Deposits Are Under Your House

Milagros Salazar

LIMA, Nov 19 2008 (IPS) - "Just imagine you’re told you have to leave your house, your livestock, the graves of your loved ones, and then they take you to an unfamiliar place without even asking you what you think about it. How would you feel?" asks Eduardo Sueldo, the local environment delegate in a highlands village in southern Peru.

He was describing the plight of mainly indigenous peasant farmers facing relocation because of the expansion of the mining industry.

The concessions that the state has granted to mining companies have grown more than 70 percent in the last few years as a result of the soaring international demand for minerals and the subsequent boom in prices.

Peru is now the world's second leading producer of silver, fifth of gold, and third of copper and zinc.

But because these minerals are often found under land where people live, entire villages and towns are slated for relocation.

The most egregious cases are the town of Cerro de Pasco, in the central department (province) of Pasco, where the Peruvian firm Volcan operates; the town of Morococha in the central department of Junín, where the Chinese company Chinalco plans to mine for copper; and the rural district of Fuerabamba, in the department of Apurímac in the south, where Xstrata Copper – the world’s fourth-largest copper producer, which forms part of the Switzerland-based Xstrata – operates the Las Bambas mine.

Living on the edge – of an open pit mine

In Cerro de Pasco, a mining town of 70,000 located at 4380 metres above sea level, 11,000 families are to be immediately relocated.

The town sits next to a gaping open pit mine, where Volcan is mining for zinc. And the expansion of the company’s Plan L project to mine for silver and lead as well will worsen the already abysmal living conditions of the local population.

Eighty-five percent of the homes along the edge of the open pit mine are at high to medium risk of health problems, according to a 2006 report by the government’s Civil Defence Institute.

Health Ministry studies carried out in 2005, 2006 and 2008 found that a majority of children and pregnant women in the area had blood lead levels exceeding 10 micrograms per decilitre of blood (mcg/dl), the acceptable limit set by the World Health Organisation (WHO).

In May, the Peruvian Congress passed a law to relocate Cerro de Pasco for reasons of "public need and national interest," but the executive branch raised objections to the bill and sent it back to the legislature. However, the discrepancies are about to be overcome, says legislator Gloria Ramos, who sponsored the bill.

But on Sept. 5, Cerro de Pasco Mayor Tito Valle signed an agreement with Volcan for the relocation to go ahead, ignoring the opinions of the town councilors, and without consulting local residents.

The mayor agreed to grant the company over 11 hectares within the city limits for the expansion of the Plan L mine in exchange for 10 million dollars for the replacement of historical monuments and another eight million for several projects and remodeling work over the space of three years.

Ramos said the "ridiculously" small sum will only provide 727 dollars to invest in each of the housing units to be built for the 11,000 families who would have to be moved, while the company itself will reap enormous profits from the expanded mining project.

The draft legislation passed in May but not yet signed into law estimates that by requiring the company to hand over 10 percent of its profits, 5,800 dollars could go into each housing unit – eight times more than what was established in the agreement accepted by the mayor.

"Under the agreement reached with the city government, the mining company continues to have complete control over the negotiations, because it is the one calling the economic, political and social shots in the face of the mayor’s weakness and his failure to obtain a more equitable and fair deal for the population," Ramos told IPS.

The problem is that the government of President Alán García "is washing its hands of the matter by failing to participate in the negotiations between this huge corporation and the local residents," said José de Echave, the head of the mining and communities programme of CooperAcción, a local non- governmental social development organisation.

"What is happening here is an asymmetrical negotiation between a large company and local townspeople, while the state should be playing a key role in participating, to help even out the terrain," de Echave told IPS.

Circumventing the authorities

Chinalco (Aluminum Corporation of China), which operates in Morococha, has ignored social organisations and circumvented the local authorities, according to de Echave, and is directly negotiating the relocation operation with each family due to its need to begin its open pit copper mining project as soon as possible.

In Morococha, located at 4400 metres elevation, copper is still extracted in underground mines. The town grew up around a mining camp on top of the copper deposits, which have had different owners, like Chinalco’s predecessor, Minera Perú Copper S.A.

Morococha Mayor Marcial Salomé told IPS that in July 2005, he asked the company to sign a framework agreement that would provide an opportunity for progress for the community, and get the relocation process going smoothly.

But "so far there has been no formal response from the company…They say they agree, but it’s only words, nothing written," he said.

The representatives of Chinalco told the press that the resettlement process should be carried out in 2011, with an investment of 40 million dollars for the construction of 1,200 housing units.

But there is no information on what role the various government bodies at different levels will play.

The mayor has requested the support of the central government and the Ministry of Women and Social Development, which by law has the obligation to act as a mediator in relocation cases involving development projects.

In Ramos’s view, despite the legislation that requires the involvement of the Ministry of Women and Social Development, what is needed is a broader law containing basic criteria to guarantee the rights of affected populations, based on international standards established by the United Nations and the World Bank.

Relocating from the countryside

Unlike in the urban areas of Cerro de Pasco and Morococha, the mining operations of Xstrata in Apurímac in the south involve the resettlement of campesinos (peasants) from the rural community of Fuerabamba, who depend on farming and small-scale livestock raising.

Víctor Noa Ccorpona, a young villager from Fuerabamba, told IPS that his community has little information on the resettlement plans, over which it is divided.

The older campesinos attached to their traditions and those who have large fields of crops and pasture land would prefer to stay, while the younger farmers would not mind starting a new life elsewhere, if the company gives them jobs and provides an education for their children.

But there is an added dimension, which makes the situation even more complex: the people of Fuerabamba have a reputation as livestock rustlers, and relocating them will not be easy, because other villages in the area do not want them as neighbours.

"We are used to living out on our land, and now they say they want to build us an urban settlement…we don’t know what is going to happen," Eduardo Sueldo, the environmental delegate in Choquecca, a village next to Fuerabamba, told IPS.

Choquecca is also facing an uncertain future because it lies within Xstrata’s area of projected operations.

Although the relocation would appear to be imminent, because the copper deposits lie directly beneath Fuerabamba, the new situation created by the global financial crisis could dampen the sense of urgency.

Pointing to the recent fall in minerals prices, José Luis López Follegatti, an expert with the Civil Labour Association – a private nonprofit group that promotes sustainable development by means of environmental projects in southern Peru – said mining companies may now modify earlier decisions and postpone the start of new projects.

In de Echave’s view, slower expansion of the mining industry would provide "an opportunity for the companies to redefine their social policies towards the local populations in the areas where they operate," in order to incorporate sustainable development objectives in future agreements.