Sun, Jun 08, 2014 - Page 14 News List

Mining boom enriches Peru, leaves highlanders destitute

Though the world’s largest copper-zinc mine generates billions in profits and has made the state it is in Peru’s richest, locals still lack amenities such as roads and hospitals, with poverty and malnutrition rates soaring

By Frank Bajak  /  AP, SAN ANTONIO DE JUPROG, Peru

The Marzano-Velasquez clan lived a simple, pastoral life on a mountain in Peru that happens to sit atop the world’s largest known copper and zinc deposit, but their lucrative position did not make them rich.

When Maria Magdalena Velasquez signed away her family’s share of the windswept moorlands with a thumbprint in 1999, they — like dozens of other Quechua-speaking families who sold their land to international mining consortium Compania Minera Antamina SA — thought the open-pit mine would lift their long-neglected highlands district from poverty.

Two decades ago, the rugged, mineral-rich Andean nation of Peru bent over backward to attract mining multinationals and became Latin America’s undisputed leader in economic growth as a result. Yet the boom has been more of a curse for families like the Marzanos, who saw the US$49,000 they got for their land quickly evaporate, while promises of jobs, decent schools and healthcare failed to materialize.

Instead, the locals who live in the country’s rural highlands have been battling one environmental disaster after another. Frustration over lax industry regulation has led to a growing fury of protests, with at least eight people killed by security forces at two mining projects in 2012. Of the 81 active environmental disputes that the government in Lima listed as of April, half a dozen involved joint mining venture Compania Minera Antamina SA.

The Marzanos are leading one of the protests, fighting what they consider the Antamina mining complex’s continuing encroachment and unfulfilled promises.

The mine, owned by a consortium comprised of BHP Billiton, Glencore/Xstrata, Mitsubishi Corp and Teck Resources Ltd, netted US$1.4 billion in profits in the year ending in June last year.

Half of the 30 percent tax on its profits is distributed in its host state, helping make the district of San Marcos in Huari Province where the mine is located the country’s richest. Yet despite the about US$50 million a year it receives in royalties, the district has no paved highways, no hospital and no water treatment plant. Nearly one-third of toddlers there suffer from chronic malnutrition, double the national average.

Beset by graft, San Marcos has cycled through four mayors in four years, three of whom were charged with inflating public works contracts, as well as giving jobs and kickbacks to relatives. Their successor, San Marcos Mayor Julio Blas Rimac, is under investigation for the same crimes.

Antamina says it spent US$314 million from 2007 to last year on infrastructure and “social inclusion” projects in the region, including in pre-natal and dental care, child nutrition and animal husbandry.

Asked why San Marcos residents nevertheless live so poorly, company spokesman Martin Calderon suggested that such questions be “directed at the authorities, be they national or regional.”

World Bank guidelines stipulate that the people relocated over big mining projects should end up with equal or better living standards. Yet the poverty rate in Peru’s mining-scarred highlands is about 50 percent, double the national average.

Only one of Velasquez’s nine children works at the mine and all are fighting it. They curse its rock-loosening blasts, which hurl up blood-orange dust that contaminates people, crops and livestock.

“It penetrates your skin, like ashes from a wood fire,” Lidia Zorilla, a 34-year-old farmer in San Antonio de Juprog, said as a dust cloud wafted over her.

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