Peru Government outlines changes following mining protests

Production and Markets

Publishing Date: 06 Jan 2012 12:30pm GMT
Author: Mining Journal

The government of Peru has announced proposed changes to its mining framework, in the wake of a series of protests against mining projects last year.

In an address to the national congress, cabinet chief Oscar Valdes said that mining companies will be required to establish an environmental conservation fund as a part of future contracts.

“The environmental guarantee fund will be used in case of any damage done to the natural surroundings,” said Valdes, adding that the government’s new plan for responsible mining was fundamental to the viability of future mining investment.

In addition, Peru’s government is to set up an office responsible for handling social conflicts arising from mining and other industrial activity. In August 2011 the congress approved a law which obliges prior consultation with indigenous communities before projects can be developed.

Newmont Mining Corp’s Conga gold-copper mine was among a number of operations which drew protests in 2011. Disputes also took place at projects owned by Anglo American plc, Bear Creek Mining Corp, and Southern Copper Corp.

Newmont recently outlined projected contributions to Peru and the Cajamarca region in documents published on its website. The company estimated that the Conga project would contribute more than US$2 billion in income tax and US$680 million in royalties, accompanied by approximately US$37 million of investment in local infrastructure and social programmes.