By Sanjay Suri
LONDON, Mar 28 2007 (IPS)

A report from an independent group has warned against the potentially damaging consequences of a copper mining project in the highlands of Peru.

The billion-dollar Rio Blanco project in Piura seeks in the first stage to demolish a hill to make way for an open-cast mine. But the mining could extend well beyond one hill, co-author of the report Prof. Anthony Bebbington of the School of Environment and Development at Manchester University told IPS.

"As projected to the investment community in the UK, this is potentially a much larger site," Bebbington said.

The report into the social and environmental consequences of the project was prepared for the Peru Support Group (PSG), an independent British group that has been campaigning primarily for the protection of human rights in Peru. Its concern with mining projects has arisen out of the human rights implications of some of these.

The group is focusing on this case partly because Minera Majaz, the company tapping the hills for copper is a wholly owned subsidiary of the British company Monterrico Metals.

Ownership of the hills under threat is claimed by two local peasant communities, and there is considerable dispute over the rights of the company in relation to the rights of the local peasants. Many confrontations have taken place, resulting also in the killing of two local persons.

Eventually the pits created are projected to go down deeper than the water level, and fill up with water that is likely to be contaminated. "It&#39s another question how this water would be managed," he said.

The PSG has sought to involve several British MPs in its new campaign following launch of the report at the British Parliament Tuesday. In March last year the group sponsored a meeting at Parliament "which showed significant disagreements between Minera Majaz and local citizens&#39 organisations regarding the dynamics of environment and development around the company&#39s exploration activities," the support group said in a statement.

But Minera Majaz has received a takeover bid from a Chinese consortium based in Hong Kong, raising concerns how far any commitments made by the British management would be honoured if it is taken over. The offer period from the Chinese to Monterrico&#39s shareholders has been extended to Apr. 13.

For the Peru Support Group, this is also a test case. "The case is emblematic of broader issues in the relationships between mining, society and development that are relevant to the operations of other British mining companies in Peru," it said.

Peru has a long history of mineral extraction, but investment in the mining sector has increased rapidly since the early 1990s, a direct effect of policy reforms of the Alberto Fujimori government.

Between 1990 and 1997 investment in exploration increased 90 percent worldwide, four-fold in Latin America, and 20-fold in Peru, the PSG said. By 2003 mining accounted for 57 percent of all exports in Peru, and 37 percent of foreign direct investment between 2001 and 2003.

"Given the large profits being made from mining at a time of significant mineral price increases, and in the light of the very limited evidence that mining has contributed to sustainable local development in Peru, this territorial expansion has generated increasing social conflict," the report says.

"Violence and unrest threaten if relations do not improve between local residents and the British-based Monterrico Metals company," the PSG warns. "And if engineering standards at the proposed mining project are not safeguarded the project runs the risk of centuries of pollution of the Amazon river."

Opposition to many forms of mining throughout the country is growing swiftly as residents see few tangible benefits from projects which endanger their water supplies, animals and agriculture, it says.

The 48,000-word report comments on the present "lack of trust and limited scope for rational debate" about the project and points out that the Defensoría del Pueblo (the Office of the Peruvian Ombudsperson) concluded that the presence of Monterrico Metals&#39 operating subsidiary Minera Majaz on community lands was not grounded in law.

"Freedoms will be compromised and human security will be compromised" if the company fails to act responsibly and intelligently, says the report which was prepared by a five-person delegation which visited the mine site in October.

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