Copper price rise presages renewed conflict

11 March 2018

With copper prices up nearly 18% on this time last year, it is not surprising that major mining companies are reconsidering projects shelved only a few years back and pushing the government for approvals. This is still less surprising since many analysts now predict that prices will continue to rise this year with demand exceeding easily available supply.

Among those most anxious to win government approval is Southern Copper whose Tía María project in Arequipa has been suspended for several years. The company has also just taken over development of Michiquillay in Cajamarca.

The main barrier to Tía María has been fierce opposition from nearby agricultural communities, fearful that the project will siphon off water supplies essential to keep irrigated farm production going. The Michiquillay concession, sold by Anglo-American in 2015, also caused major concerns for similar reasons. Indeed, Cajamarca has been one of the areas where opposition to indiscriminate mining development has been most strident, as evidenced by the long-suspended Conga project.

As we have noted, the tally of environmental and social protests produced monthly by the Defensoría suggests a diminution in opposition to mining in recent years. A major reason for this has been the mothballing of several of the more contentious projects.

Now that prices are moving firmly upwards and mining companies are looking to reboot global supply, it is to be expected that conflicts will again rise.

Tía María will be a test case. The Kuczynski administration, or at least the Ministry of Energy and Mines, has made no secret of its desire for Southern to push ahead. However, the locals in Islay, the province in which Tía María is located, have also made clear their will to resist the project by whatever means they can.

Watch this space.


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