Barclays: Peru Needs Systematic Solution to Social Conflicts

Barclays Capital said Peru’s government needs a systematic solution to social demands in the mining sector, rather than “putting out fires” amid opposition to individual projects.

“The issue is political since we have seen social demands that need to be resolved systematically or structurally and not necessarily by putting out fires,” said Barclays Capital’s Roberto Melzi, state news agency Andina reported.

Melzi recommended that the government bring together residents that live nearthe project, local government officials and the private sector to resolve disputes through dialogue.

Social conflicts have been a major challenge to numerous mining companies that are developing projects in Peru. Most recently, the Minas Conga project, owned by Newmont Mining’s gold producer Minera Yanacocha, was suspended due to opposition over concerns about its plans to drain three lakes and channel the water to reservoirs.

Protests had halted in early December but resumed this week as opponents held a two-day demonstration, while the government has promised to hire consultants to review the project’s environmental impact study, a key permit that was approved in 2010. 

Benito Berber, an analyst with investment bank Nomura Securities, is optimistic about the initiative to review Conga’s EIS.

“It is positive that the involved communities can be heard and we are moving closer to an equilibrium where the communities have a greater voice,” Berber said.

Yanacocha has planned to invest up to $4.8 billion in Conga, making it Peru’s biggest private investment project.

Leave a Reply

Your email address will not be published. Required fields are marked *