By Dow Jones Business News, September 16, 2013, 04:17:00 PM EDT
By Ryan Dube
AREQUIPA, Peru--Peruvian Mines and Energy Minister Jorge Merino said Monday he is confident that the Tia Maria copper
project and the Minas Conga copper and gold project will overcome community opposition.
The two projects have represented the Peruvian mining sector's struggle to resolve opposition to industry activities
in rural communities. Resolving the disputes has been one of the biggest challenges facing the government and companies
in one of the world's biggest producers of copper, gold, silver and zinc.
Southern Copper Corp.'s (SCCO, SCCO.VL) $1 billion Tia Maria project was suspended in 2011 following violent protests
by local residents concerned about its impact on the local water supply. The company is currently working on a new
environmental impact study that will involve pumping in sea water.
Mr. Merino said that the company's decision to use sea water will help it win approval from local residents. "This is
a big step. We're sure that Tia Maria is going to be one of the new projects in development," he said.
Mr. Merino also said that Minera Yanacocha, which owns the $5 billion Minas Conga project, is making advances in
gaining support from surrounding communities, which are also concerned about its impact on the local water supply.
Yanacocha is 51.35% owned by Newmont Mining Corp. ( NEM ). Compania de Minas Buenaventura (BVN, BUENAVC1.VL) and the
World Bank'sInternational Finance Corp. also have a stake.
Violent protests against the Minas Conga project last year left a number of people dead and led the company to suspend
work, except for the construction of water reservoirs. Yanacocha says it is building the reservoirs prior to starting
work on the mine in order to ensure the supply of water.
Opponents of Minas Conga continue to hold protests. However, recent demonstrations have been smaller. Mr. Merino said
that round table discussions with local residents are starting to pay off.
"Conga continues to be a challenge," he said during a press conference at a mining conference in southern Peru. "But
we are confident that with this new relationship that the company is developing with the communities that Conga is also
going to be developed."
Mr. Merino also said that the startup of new mine projects in the coming months will help support Peru's exports and
the government's tax collection.
In the first seven months of this year, Peru had a trade deficit of $1.2 billion, compared to a trade surplus of $2.9
billion in the year-earlier period, due to a sharp decline in exports. Exports have fallen mainly due to lower metal
prices as demand for commodities from China has weakened.
Authorities have said that the startup of new mine projects will boost export volumes, helping to offset lower metal
prices. The next large-scale mining project scheduled to start production is Chinese-owned Minera Chinalco Peru's
Toromocho copper project. Toromocho is expected to start production before the end of this year.
"In 2014, we are going to increase our mining exports by 10% thanks to Toromocho," Mr. Merino said.
He said these projects will also help improve the central government's tax collection from the mining sector. Tax
collections from the mining sector fell 40% in the January to August period, compared to the same period a year earlier.
Write to Ryan Dube at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.