LIMA: Peru will nearly double its copper output in the next two years and will not give up on a $5 billion project by Newmont Mining that has stalled due to community opposition, its mines and energy minister said.
Jorge Merino told Reuters the government is looking to loosen the process of awarding permits for mining projects while trying to mediate agreements between companies and locals.
Peru, which has vast mineral resources, is the world’s second-largest producer of copper and sixth of gold, but many Andean communities suffer from widespread poverty and worry mining projects will generate pollution but little economic benefit.
The administration of President Ollanta Humala said in August it would essentially stop trying to overcome local opposition to US-based Newmont’s Conga gold project in the northern region of Cajamarca -nearly conceding defeat in a protracted political battle.
Newmont has said it was temporarily suspending work on the Conga mine while it builds community water reservoirs and seeks local support for the project.
“Conga must go forward,” Merino said. “We don’t have the luxury to lose an investment that big.”
Mineral shipments make up about 60 per cent of Peru’s export earnings.
Tensions over the spoils of natural resources have threatened to derail some $53 billion in investments over the next decade in the country, South America’s fastest-growing economy.
But Merino said that many plans are going forward -such as Xstrata Copper’s $1.47 billion Antapaccay mine, HudBay Mineral’s $1.5 billion Constancia project and the expansion of Freeport McMoran’s Cerro Verde copper mine. Southern Copper is also working on a revised environmental plan for its $1 billion Tia Maria project.
He said new projects slated to come online through 2014 will allow the Andean nation to churn out an extra 1 million tonnes of copper per year -on top of the 1.3 million it produces now.
“They’ll be good years,” he said, adding that Peru could produce more than 5 million tonnes of copper by 2030.