Take physic, pomp

Xstrata’s Tintaya mine in Peru

Here are a few things to know about a complicated situation, both regionally and politically.
1) Start with this Reuters report that does a good job in covering the bases and pointing to the issues behind this protest.
2) Peru’s government has now declared a state of emergency in the region, which is mainly to stop crowd assemblies and helps de-block roads quickly.
3) Latest reports say that there have been four deaths from the disturbances and plenty of injured, including injuries to around 30 police officers.
4) Yes, as the national level politicos and the company points out, the protests are almost certainly being driven by left wing groups that are the same people behind the Conga protests. And yes, although not perfect (Tintaya has a history of imperfect relations with its local hosts, stretching back to days long before Xstrata bought the asset) the mine does a reasonable job, does contribute to locals and its environmental record is acceptable (the main complaint from locals is less about water contamination and more about the dust that’s kicked up by the supply and haulage trucks that go to and from the mine, as the dust clouds affect grazing pastures and animal livestock).
5) However, there’s no smoke without fire and the left wing groups pushing this protest have tapped into the feelings of people who are not content with the relationship between themselves (largely poor or very poor) and the mine (a big wealth generator for itself, the State and a small group of locals). Fact is, if you spent years in abject poverty while watching brand new 4X4s speed past you every day then went home to your house with no water or electricity supply to eat a plate of potatoes after 14 hours in the fields, you might get a bit pissed at your neighbours, too.
It’s not a simple, cut and dried protest and there’s a larger political game in play too, so a blog post such as this one will only ever touch on a few of the main issues and leave other things out. Nationally, Humala’s government is now being sorely tested and those that want him to go back to his leftist roots (his impressively quick move to the centre and even to the right wing has been documented on these pages for the last 12 months) are pushing political buttons. It remains to be seen how he reacts, because if he doesn’t make a stand soon, Peru’s image as miner-friendly is going to go down the toilet.

UPDATE: Your humble scribe receives a couple of mailed in comments on this post and as a result will fill in a couple of gaps in this overview post. Firstly, Xstrata does contribute a decent wedge of cash to the local area, but the way in which it’s done is mostly via the Peru law that hands the cash over to the regional government, who is then in charge of spending the money. The problem is that Xstrata can legitimately say it’s making big contributions and the locals can legitimately say that they feel no benefits, because the regional government is run by a bunch of self-serving fools who don’t have a clue about how or on what they should spend the windfall.  Secondly, I say that Peru’s image as miner-friendly might go down the toilet, not for this protest or the Conga protest, but for the ones that come. If Humala doesn’t make a stand one way or the other and just tries to let this issue slide, there will be other protests about other big mines, be they operating assets or projects. When two major headline grabbing mine protests become three or five or a dozen, that’s when the image crisis will really kick in.

UPDATE 2: Another good report just filed by Reuters this afternoon. They’re doing good work and you can read it here. 

UPDATE 3: Darnit, even more great work from Reuters in this report. They’ knocking it out the park today

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