Peru is South America’s fastest-growing economy and produces the second largest volume of copper in the world after Chile. It also produces a significant quantity of gold. When the state invited bids for the Las Bambas mining project the Swiss firm managed to outbid its competitors thereby winning the concession.
Xstrata’s plans to include social development projects and environmental protection measures have so far met with resistance. Jorge de Chavez, an expert from the miners’ advisory group Cooperaccion, believe that promises made to locals will not be kept. Swissinfo.ch reported Chavez to have said that an unrealistic promise of hundreds of jobs was made to secure the concession. Already locals have protested for the company to hire more local residents and to improve infrastructure.
Furthermore, environmentalists are concerned about the large volume of water that the new mine will require for the operation, since water is in a short supply in the region. It is feared that drinking water, agriculture and cattle-rearing could be threatened. Environmentalists are familiar with the case of the Alumbrera mine in Argentina. It is one of the ten biggest copper and gold mines in the world which is half owned by Xstrata. The investors and local leaders had promised to build a hospital, a school and housing for 5,000 residents while providing 1,800 new jobs. Now 15 years later, the promises have not yet been fulfilled. The company employs only 50 locals in a region where there is a 25% unemployment rate.
However, Xstrata claims to be following international best practice environmental management standards. Employees refute that claim instead stating that the accreditation system is rigged in favor of the investors. The fact that laws for foreign operators are less stringent in South America than in developed countries, has also contributed to lax practices. These result in negative effects and mistrust of foreign investors by locals.
(Information rewritten from an article by Pierre Bratschi in Buenos Aires, swissinfo.ch – Translated from French by Simon Bradley)