Quellaveco Unlikely To Work As Model For Other Mine Projects – Analyst

Calls to hold up Anglo American’s Quellaveco copper project as an example to resolve social conflicts in Peru’s mining sector are unlikely to have success in resolving opposition to a string of projects in the Andean country, according to a well-known analyst.

Jose de Echave, a former deputy environment minister, said during an interview with Ideeleradio that each conflict needs to be analyzed on its own.

“There aren’t models. There can be some similar actions, but I don’t think there are models that can be replicated exactly the same,” De Echave said.

Last week, Peru’s government announced that Anglo American and Moquegua’s regional government reached an agreement to develop Quellaveco after some 14 months of negotiations. As part of the agreement, Anglo American has made a commitment to spend 1 billion soles (approximately $382 million) in social development, while also giving jobs to the local population.

The agreement paves the way for Anglo American to develop Quellaveco, which will produce about 220,000 tons of copper a year and require an investment of about $3 billion. Construction should start later this year, with production beginning in 2016. The project, at an altitude of 3,500-4,000 meters, has a probable mining life of 32 years. It is 37km northeast of the city of Moquegua.

Like other large-scale mining projects in Peru, Quellaveco had been delayed due to opposition over concerns about its impact on the environment, most notably on the water supply.

The agreement has been held up by the private business community as a potential model for other projects that have faced community opposition, and by some conflict resolution specialists as an example that agreements can be reached. The most important project facing local opposition is US-based Newmont Mining’s Minas Conga gold project, which is located in the northern region of Cajamarca.

However, De Echave said Tuesday that it would be unlikely that the model for Quellaveco could be transferred to Minas Conga.

“Not all of the conflicts are the same,” he said. “Conga is not the same as Quellaveco. The region of Moquegua is not the region of Cajamarca.”

In the case of Cajamarca, not only has the conflict become very political and gone beyond the initial environmental concerns but there is also a deeper, widespread mistrust among the population towards Yanacocha, the company owned by Newmont Mining and Minas Buenaventura that is developing Minas Conga and operates the partnership’s gold mines in the region.

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