Colombia, Ecuador & Peru: Social engagement can make or break mining investment

Henry Lazenby | May 20, 2022 | 12:36 pm News Latin America

Communities protesting against Las Bambas set up new conditions to negotiate with Peruvian government

A 2021 meeting with farming communities protesting MMG’s Las Bambas copper mine in Peru. (Reference image by Peru’s Presidency of the Ministers’ Council, Flickr).

Companies operating in Colombia, Ecuador and Peru should do a better job of engaging and sharing the wealth their mines generate.

Observers tell The Northern Miner that implementing corporate social responsibility (CSSR) programs when mining business in Colombia, Ecuador, and Peru is simply not enough to guarantee success.

Instead, mineral explorers and developers often see substantial projects halted in their tracks by staunch community-level opposition, even when projects had passed regulatory muster, says mining sector researcher, analyst and reporter Paul Harris, in an interview.

Legacy CSR programs are simply no longer adequate. The analyst suggests those wishing to do business in these jurisdictions take a more holistic approach toward meaningful engagement with host communities before engaging governmental authorities about their respective projects.

The solution, according to Harris, is companies today have to be willing to give up an ownership stake in their projects so that local communities and local and federal governments have more skin in the game.

“There is a tonne of options on how companies can make stakeholders see things through the lens of a shareholder,” said Harris. “When host communities can sit down and plan what their revenue over the long term will be, whether it’s 5% of $100 million per year over three decades, they can translate that benefit into economic development in the communities supporting any particular mine,” he says. “That’s what meaningful stakeholder engagement looks like.”