7th October 2021

WRITTEN BY:
Vincent Fevrier
Intelligence Manager
Protest actions reported by
Intelligence Fusion in Peru.

Protest actions shown are motivated

by political upheaval, economic
downturn, COVID-19 restrictions,
and due to social conflicts between
mining companies and local
communities among other reasons.

Between August 2020 and August

2021, an average of 203 protest
actions were taken a month, with
231 during the month of August
2021.
Peru has been a leading producer of copper,
silver, gold, lead, zinc, tin, and boron among
other minerals.
The country’s wealth of minerals has led to a
high degree of investment both from domestic
and international mining companies. This
investment has not been without controversy
and conflicts over social and environmental
issues.
The Ombudsman’s Office of the Government of
Peru released a report in August 2021 which
stated that Peru was currently the scene of 196
social conflicts, with 139 being active and 57
considered latent.
The regions most impacted by these conflicts
were Loreto, Cusco, and Ancash.
The motivation for most conflicts (127 cases)
were linked to socio-environmental issues,
including due to mining operations. While not all
social conflicts are related to mining, the
majority of conflicts are, with an average of 67
conflicts a month since August 2020, including
59 recorded in August 2021.
Map showcasing the number of conflicts in Peru per region in
August 2021, with the regions of Loreto, Cusco, Ancash,
Apurimac, Ayacucho among some most impacted, and with
social-environmental issues being the main motivator of
conflicts.

Other reasons for conflicts include labour relations, matters

between communities and local, regional and national
governments, territory boundaries, and communal relations.

Source: https://www.defensoria.gob.pe/wp-
content/uploads/2021/09/Reporte-Mensual-de-Conflictos-Sociales-
N%C2%B0-210-agosto-2021.pdf
Numerous industries nowadays engage in
Corporate Social Responsibility (CSR) while
operating in countries across the world.
In the mining sector, CSR involves voluntary
actions that look to improve the living conditions
of local communities where the operations will
take place, or projects to reduce the negative
effects of mining projects.
Projects can include the improvement of road
conditions, building schools and medical
facilities, bringing clean water and electricity to
communities, or undertaking certain projects to
support microbusinesses or health and hygiene
initiatives.
Mines often need an area of land larger than the
mine itself for their projects, and therefore CSR
is not optional if they want to operate with the
support of the local communities. This is
significant as the need for minerals is increasing
with the revolution in green technologies, as well
as industries like electronics and car
manufacturing requiring certain minerals of high
importance for some of their components.
Mining often takes place in areas of limited
government control where relations with local
communities are key in order to operate safely.
 Protests in Southern Peru

Significant mining projects have

been the site of significant social
conflicts in the past two years,
including around issues linked to
the Las Bambas Mine (Blue) in the
region of Apurimac, and the Tia
Maria Mining Project (Green) in
the region of Arequipa.
The Las Bambas mine is an open pit mine at
approximately 4,000 meters above sea level in the
region of Apurimac.

The copper mine is a joint-venture project, with

operator MMG Ltd the majority stakeholder. MMG Ltd
was formed in 2009 when China Minmetals purchased
a majority of assets of Oz Minerals and is
headquartered in Australia. After being mined and
processed, minerals from the mine are moved via Source: mining.com

truck and rail to the Port of Matarani to be shipped

worldwide.

Commercial production at the mine begun in July

2016. On the MMG Ltd website, they state that more
than 6,000 direct and indirect jobs were created.
Source: mining-journal.com
 The mining project has seen protests since September
2015 for a variety of reasons. Some of the protests
were caused by the company backing out of a project
proposed by the previous mine owner, Glencore, of
building a pipeline to transport minerals to the
neighbouring province of Espinar in the region of
Cusco. MMG Ltd modified the plan after considering it
was not profitable for them.

In 2015, locals in the region were concerned that the

mine would cause environmental damage to the area.
Source: Peru Mining Conflicts Observatory
Some protesters at the time attacked the mine,
causing some damage, and at least four protesters
were killed in clashes with authorities.
Selection of incidents surrounding
the Las Bambas Mine in the Apurimac
region and the neighbouring region of
Cusco.

Social unrest has included road blocks,

as well as clashes between local
communities and police which has led
to casualties.
More recently, roadblocks have been put in
place by community members due to anger
over the mine’s use of the communal highway,
replacing the original plans from the
Environmental Impact Study. Some communities
have also said that sections of the road have
been turned into a national highway and are
seeking compensation for the company to use it.
Other reasons for targeting the mine include
communities wanting the government to
transfer corporate tax revenue from the mine to
the local communities for their development,
while others have protested to become suppliers
of goods and services to the mine.
In September 2021, negotiations broke down
between the communities of Chumbivilcas and
the mine regarding locals becoming suppliers,
and the residents decided to restart protest
actions in Huaylla Huaylla. However, at the end
of the month, after close to three weeks of road
blockages, the government announced a
tentative deal to lift the roadblocks while further
talks with community leaders were to take place.
The mining project and the associated protest
actions by local communities showcase the
operational and logistical issues mining
companies face if relations between themselves
and local communities breakdown.
Selection of incidents impacting the Tia
Maria mining project in the region of
Arequipa in 2019 during a significant
period of protests against the project.

The project has long been delayed due to

fears by local communities over
environmental impacts. The Minister of the
Economy in September said the project was
socially and politically unfeasible, putting
fears that Southern Copper would not be
able to get the project going in the near
future.
The cost of delays to mining projects due to
social conflicts in Peru is not always clear or
reported but the value of projects delayed
between 2011 and 2015 was said to be USD
21.5 billion, while the mining investment
portfolio increased to USD 45.6 billion the year
after.
The delay in projects of such values leads to loss
of tax revenues for the country, but also cost
mining companies, both domestic and
international, if production or exportation is
brought to a halt. The Las Bambas Mine was
disrupted by protests for more than 100 days in
2019.
In December 2020, the mine was again the
target of protests, and the actions of local
communities blocked the exportation of 189,000
tonnes of concentrate, (which is said to be the
equivalent of USD 530 million) during the
protests.
Social conflicts, particularly in regard to mining,
are complex due to the involvement of
multinational companies, local communities, and
the national government, which is not always
trusted in not only their actions at the start of
projects but also in their mediation efforts
between mining companies and local
communities.
Social unrest, particularly in Lima, was
seen during the election and post-
election of President Pedro Castillo.

Castillo was a popular figure during the

election due to talks of taking on the
mining companies for the benefit of the
local populations, with talks of the
nationalisation of mines. This rhetoric led
to strong support for Castillo in the mining
regions of the country.
As the mining industry is of significant importance
for Peru’s economy, mining projects are not likely to
subside. Continued investment in the country’s
mining industry will almost certainly lead to future
social conflicts between mining companies and local
communities.
Conflicts are likely to be exacerbated by additional
problems such as climate change which will put a
stress on communities through extreme hazards such
as droughts and floods. Local communities relying on
agriculture will likely come into conflict with mining
operations over the use and threats to water sources.
While nationalisation has been tabled thus far, in late
July 2021, the Minister of Energy and Mines said that
they would incentivise projects that have “social
profitability”.
President Castillo will seek to keep mining companies
investing in the country, but provide for local
communities through social projects and
infrastructure funded by increasing taxes on mining
companies.
If this plan does not bear results, local communities
are likely to continue to protest in order to put
pressure on the government and the mining
companies. This would lead to increased costs to
mining companies who would likely face delays in
production and exportation from roadblocks and other
protest actions as seen previously, as well as
significant reputational impacts.
Extractive companies are under increasing
pressure to be more socially responsible and
community engagement is essential for gaining
a social license to operate in all areas of the
world.

An effective community engagement strategy

can be the key to a secure operating
environment and minimal disruption your
business.

We’ve produced a 10-page guide to provide you

with a practical outline for building relationships
with local communities and the processes and
tools required to be successful.
using the link in the comments section