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Investment in Peru delayed by social conflicts over water

Keywords: Tags  Peru mining, SNMPE, Pedro Martinez, Newmont Mining, Southern Copper, Las Bambas, Minas Conga, Tia Maria Ollanta Humala

SÃO PAULO — Social conflicts over water reserves have deferred more than $7 billion in Peru’s project investments since last year.

Those problems are expected to continue, Pedro Martínez, president of Peruvian mining, oil and energy society SNMPE, had said at the end of last year. "The problems faced by the (Peruvian) mining sector this year caused a delay of $7.2 billion in investments. For 2013, the same will happen with projects worth $3.6 billion; and for 2014 there are four deferred projects (valued at) $7.1 billion," he said.

The epicenter of the conflicts was Newmont Mining Corp.’s Minas Conga project in Peru’s Cajamarca region.

Locals fear that the arrival of the project will deplete water reserves in the region.

Construction work was suspended at the site after five people dies in violent protests.

Peruvian president Ollanta Humala replaced six cabinet ministers amid the backlash that followed the fatalities.

Southern Copper Corp.’s Tía Maria also was halted due to protests by local populations.

The company is expected to present a new environmental study and intends to resume work soon.

"This is more of a political problem than a problem of lack of water," a commercial executive at MK Metal Trading Peru SAC-Nexxtrade told AMM sister publication Metal Bulletin. "If large projects like Conga, Las Bambas and Tía Maria manage to start producing by 2015 in a peaceful manner, then Peru’s copper output will increase considerably." 

A version of this article was first published by AMM sister publication Metal Bulletin.

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