Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Peru’s economy and finance minister has cast further doubts about Southern Copper’s (NYSE: SCCO) long-delayed $1.4 billion Tia Maria project, in the southern Islay province of the Arequipa region, by saying he believed the proposed mine was “socially and politically” unfeasible.
“Tía María has already gone through three or four waves of community and governmental attempts of repression and death. I don’t think it’s appropriate to try again if you’ve already crashed into a wall of social resistance once, twice, three times…” minister Pedro Francke told local media this week.
President Pedro Castillo has singled out the Tia Maria project as a non-starter under his administration, a view that has been echoed by other member of his cabinet, including Minister of Energy and Mines Ivan Merino.
Despite its ongoing opposition to Tia Maria, Peru’s current administration is working on a new approach to unlock more of the country’s vast mineral wealth
Southern Copper, a subsidiary of Grupo Mexico, has experienced several setbacks since it first announced its intention to develop Tía María in 2010.
Construction plans have been halted and readjusted twice, in 2011 and 2015, due to fierce and at times deadly opposition by locals, who worry about Tia Maria’s impacts on nearby crops and water supplies.
Peru’s previous government approved Tia Maria’s licence in 2019, a decision that triggered yet another wave of protests in the Arequipa region.
Developing the controversial project would be a breakthrough in a country where mining’s relations with isolated rural communities often sour.
Despite its ongoing opposition to Tia Maria, the Castillo administration is working on a new approach to community relations and red tape to unlock more of the country’s vast mineral wealth.
The mine is expected to produce 120,000 tonnes of copper a year over an estimated 20-year lifespan. It would employ 3,000 people during constructions and provide 4,150 permanent direct and indirect jobs.
Peru is the world’s second biggest copper producer after neighbouring Chile and a major supplier of silver and zinc.
