Deal on MMG's Las Bambas mine restart still far off

January 3, 2022

A deal between Peru’s government and protestors in the town of Chumbivilcas who blocked transportation routes at MMG Ltd’s Las Bambas copper mine remains elusive according to a community advisor and a government source who spoke to Reuters.

Residents of Chumbivilcas have claimed a lack of compensation and blocked the key copper transport road to the mine for over a month, forcing Chinese-owned Las Bambas to shut down production on Dec. 18. Communities agreed to a brief truce in December to unblock the road but said they would resume the blockade if no deal was reached.

Peru's Prime Minister Mirtha Vasquez planned to go to Chumbivilcas in the government's most ambitious effort yet to broker a restart deal, as the shutdown has become a major problem for Peru's leftist administration.

A government source familiar with the matter, who spoke on condition of anonymity to speak freely, also said the two sides are still divided.

Peru is dependent on the mine's tax revenue - Las Bambas alone accounts for 1 percent of the country's gross domestic product - but the government has also pledged to prioritize the needs of impoverished communities.

Giselle Huamani, who heads conflict resolution for Peru's government, said in an interview that the government will unveil details of a proposal to benefit Chumbivilcas with higher public spending.

In a press conference, Prime Minister Vasquez said the government's spending proposal is a "solution."

Chumbivilcas and Las Bambas were negotiating earlier this year a deal in which local residents would take jobs driving copper trucks and other vehicles for the mine. But when those talks broke down in November, residents blocked the road.

Las Bambas did not respond to requests for comment, but has said in the past that a truce with the looming threat of resuming the blockade does not guarantee conditions to restart production.

The mining industry has called on the government to declare a state of emergency in the area and send law enforcement to clear the road and confront protesters, but officials have resisted the effort saying they prefer dialogue.



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