Las Bambas: the environmental challenges of Peru’s biggest mine
Nothing in Challhuahuacho, in the southern Peruvian Andes, will be the same again. Cement has replaced clay in construction work, lorries now populate the town’s narrow streets, lodging houses pop-up and new shops open. A commercial dynamism seems to have arrived in the heart of the most important mining project in Peru’s recent history: Las Bambas, one of the largest open pit mines in South America, which is estimated to produce 450 million tons of copper every year as of 2016.
Challhuahuacho sits 3,698 metres above sea-level in the Apurimac region, which has one of the highest rates of poverty in Peru. In the last few years, the demand for new jobs to construct the mine has given an impetus to the local economy, but the figures reveal persistent social problems: half the population is unable to meet the costs of essential goods and services, illiteracy rates stand at 24%, 40% of children below five years of age suffer from anaemia and chronic malnutrition affects 27%.
The mining projects have raised expectations among locals but investment in Peru’s mining regions doesn’t always equate to a better quality of life for their inhabitants. As Jose de Echave, ex-deputy environment minister and co-director of the NGO CooperAcción recognises; “the mine’s construction phase is the one that requires most manual labour. That’s already over. Operations now begin in earnest and where before they needed 10,000 workers, now they will only require 2,000. The majority of those will need to be highly-skilled. The challenge is still how to use upfront investment to generate development,” he said.
Everything about Las Bambas is enormous. It is a 35,000 hectare concession that the Ministry of Mining and Energy says will double national copper production. It will use 800 litres of water per second from the nearby Challhuahuahcho river and developers will construct a 4.2 million cubic metre reservoir to serve it in the dry season. Investors will channel around of US$ 5.8billion into the project and have already relocated an entire town consisting of 450 families (to Fuerabamba) make way for construction.
In April 2014, in what was one of the largest deals in Peru’s history, a consortium formed by MMG Ltd., an affiliate of China Minmetals Corp., which also included Guoxin Investment Corp. International and investment firm Citic, bought Las Bambas from the Swiss Glencore-Xstrata for US$ 7billion.
Even though the Peruvian government announced that extraction of would take place at the beginning of 2016, locals have raised concerns about the social and environmental impacts of the project during consultations, which have formed the basis of a handful of protests. One demand is related to a mineral processing plant and the increased amount of lorry traffic that will transport material from Apurimac to the port of Matarani.
The Las Bambas environmental impact assessment (EIA) considered the construction of a 206 metre pipeline buried one metre below the ground that stretches to the province of Espinar, in the neighbouring Cusco region, where Xstrata has another mining operation. However, opposition from communities in Cusco to the sale of Las Bambas to the Chinese-lead consortium brought about a modification to the study.
In April last year, MMG announced the cancellation of construction of the pipeline and the need to construct a processing plant in the area. Without the pipeline, lorries will have to transport the 450 million tons of copper extracted annually along a highway that cuts through dozens of rural communities. The ministry of Mining and Energy approved this modification to the EIA.
The pipeline was one of the central components of the Las Bambas mining project, communities were told. But its later cancellation was not recognized by them until several months later. “Suspending the pipeline project will bring impacts that communities haven’t been told about in the project’s EIA, because the huge number of lorries passing by will throw up lots of dust and cause pollution. This change is something that could cause unrest in the local population. It’s advisable to respect measures that prevent negative noise impacts and those felt in the streets and the air,” says Pedro Gamio, ex-Deputy Minister of Mining and Energy.
For his part, De Echave, whose organization has been working in the area since the beginning of the project, suggested that “for these communities, the change to the EIA was a surprise” and that their dissatisfaction is rooted in the impacts that increased traffic will bring. “For now, this topic is not part of the main agenda because they haven’t prioritised investment in infrastructure in the area,” Echave said.
In its last report, the Ombudsman pointed to the latent conflict between the local population and the mining company. The Campesina Federation and the Challhuahuacho Defense Front have protested over supposedly unmet obligations by the mines former owner, Xstrata Copper and Glencore, but they have now formed part of four working groups on social and productive infrastructure, mining and environment, agricultural development and social responsibility.
In response to the complaints, the company installed parasite-proof plant nurseries and supplied five thousand cattle as well as formalising the use of water from Cotabambas until August through the National Water Authority. They also opened an office through which to collect CV’s from local people who want to apply for unqualified, manual positions. They have promised to publish the amended EIA, form an environmental monitoring commission and implement a waste material management programme.
During consultations on the processing plant and the transportation of material on local highways, the regional president of Apurimac, Wilber Venegas, says that the modification has been approved by the Minister of Energy and Mining and he assured those concerned “that there wouldn’t be environmental impacts in the area.”
“The change to the EIA ought to have been more broadly discussed with local people, because its impacts will be greater than those of the pipeline,” said Gamio. The issue is, as De Echave explains; “the modification to the EIA doesn’t need such large public audiences, there’s more flexibility and readiness to accept changes.” The expectations of increased incomes that Apurimac expects to receive (through ‘canon’ earnings – which involve an annual fee paid to the landowner or lessee for the right to build on it) are so high that for the moment they’ve eclipsed the debate about environmental impacts.