Peru revokes licence of Canadian mining firm Bear Creek

Date of publication: 
26 June 2011

JULIACA, PERU — As smoke rose from burning tires and torched security vehicles, heavily armed police confronted nearly a thousand angry anti-mining protesters walking the runaway of Juliaca’s airport in southern Peru, near Lake Titicaca. One protest leader called for the group to reclaim the airport. Others said it was too dangerous. Then a call came through from the protest leaders in the capital, Lima.

The government had given into their demands and agreed to revoke the licence for Canadian mining firm Bear Creek to open its Santa Ana silver mine in the area; as well, it halted all new mining concessions in Puno province for 36 months. The unrest ended with the agreement Saturday, narrowly averting a repeat of a bloody conflict the day before, when police killed at least five demonstrators at the airport.

While the breakthrough agreement stopped further bloodshed, it casts doubts on other resource operations in Peru, a nation that relies heavily on foreign investment and receives about 70 per cent of its GDP from the mining industry. Peru is South America’s fastest-growing economy, driven by surging commodity prices, but the rural poor have benefited little from mining and complain it contaminates their water and crops. The incoming government must balance the interests of international resource firms, whose production is a huge source of national wealth, alongside those of protesters who argue mines have a devastating impact on the environment.

“Perceived protester success in the Puno region has the potential to empower a more broad-based anti-mining movement in the country, causing investor uncertainty over the security of exploration and mining concessions throughout Peru,” BMO Nesbitt Burns analyst Andrew Kaip said in a report on Sunday

The recently approved Santa Ana project in southern Peru has become a symbol for thousands of protesters opposed to mining and energy projects in the run-up to the recent election, which was won by left-wing nationalist and former army rebel Ollanta Humala. Protesters are using forceful demonstrations to pressure Mr. Humala’s administration as it decides on changes to legislation for resource firms after it takes office on July 28. Outgoing president Alan Garcia told reporters on the weekend that “dark political interests” were to blame for the deadly clashes in Puno province, which is in the southeastern region of the country.

With his presidency nearing an end, it is widely believed that Mr. Garcia gave into the demands to avoid the violence escalating under his watch and instead chose to pass the problem over to Mr. Humala

Edwin Gallegos Pasco, dean of the engineering faculty at the regional University of Altiplano, said the protests will only reduce development in the region. He argues that the formal mines bring development and less contamination than the informal mining, which will increase in place of the foreign-run mines.

Prof. Pasco believes, though, that the government is to blame for the protests, saying there is a lack of education about mining. He argues that the government should be informing the people in “peaceful times” how the contamination levels are lower in multinational mines than in smaller independent mines.

“The government always waits till it’s too late and there is a problem,” says Prof. Pasco adding that the government needs to use the income from mines more efficiently. “Their mismanagement of the economy is also to blame for the protests.”

Seeing this as a cause of the conflicts, Mr. Humala said that he will create aid programs for poor communities in order to distribute Peru’s wealth and end social conflicts over natural resources.

While the agreement may have the short-term effect of stopping the protests, many within the rallies around Juliaca voiced similar concerns about the government’s inability to share the wealth.

At a peaceful rally on Saturday afternoon in the centre of the city, speaker Andre Juli, a 42-year-old businessman, said the protesters had come together from different parts of the region to call for an end to the contamination of local waters by mining operations, which destroy their farms and do not benefit the local communities.

“The government taxes all these mines, which are destroying our environment and still we don’t see any investment in infrastructure” Mr. Juli said, standing at the back of the rally. “We have no good schools, no good hospitals. If they aren’t going to share the profits, then we should just do the mining by ourselves.”

At the funeral of a man killed in the protests, one woman from Azangaro, who did not want to share her name for fear of reprisal, said all of her farmland has been destroyed by the waste of the multinational mines.

“Even if they cancel future mining concessions, we still have to face the mines already being operated.” she said. “I don’t have any cattle, any fish, any farm left. I have nothing so I am ready to die to get our land back.”

Despite the calm being restored to Juliaca, the danger of protests igniting again remains.

Standing next to his 16-year-old son lying in a hospital bed with a bullet wound in his leg, Luis Antonio Jara, 45, said Mr. Garcia should go to prison for the killing of protesters. When asked if he believes in any agreement between the protest leaders and the government he answers abruptly. “No way. They have promised us many things before and never followed through,” he said. “We are ready to defend and die for our land”.