Relationship Between Peruvian Mining Companies and the Locals
There has been constant interaction between Peruvian mining companies and the locals of Peru. This interaction has always not been positive.
Peru has a vast wealth of natural resources. The country is an excellent location for mining companies to establish their business. Essentially, Peru is the world’s second-largest country in silver, copper and zinc production. There are many companies doing business there, so the foreign companies, local workers and the economy of Peru, all have profited well from the mining sector.
The increase in size and number of companies has caused people living in certain areas to relocate. This forced relocation did not go down well with many. It is leading to severe repercussions, even as the mining industry in Peru was expanding. In fact, in 2015 and 2016, there were several clashes between local demonstrators and the police regarding a mining project at Las Bambas, leaving four men dead. It caused a national outrage against foreign mining companies in Peru.
Mining Companies’ Collaboration With Locals
After this incident, MMG Ltd., a Melbourne-based unit of China Minmetals Corporation have brought about a change through a project that satisfies locals as well as the Mining Companies’ interests. They had been operating in Peru for quite a long time. It also helps in positively developing the mining sector.
In this project, MMG Ltd created a new town named ‘Neuva Feurabamba’, with the permission of the authorities and following the various rules and statutes. Neuva Feurabamba accommodates nearly 1,600 people who move out during mining activities.
Neuva Feurabamba plans exceptionally. It has paved streets, electricity, plumbing and proper town planning, unlike the earlier places the displaced communities came. Many people experienced a culture shock when they moved to this town from their more previous dwelling. However, all is in a positive sense, and the people have hugely benefitted due to proper housing, healthcare and education – things that they hadn’t had access to before.
The locals living in Neuva Feurabamba have progressed immensely. They continually adapt to face new challenges while living in a culturally different area, one in which they have no connection to their land. They live in good quality houses. The locals received top-notch healthcare. Their children are getting the education that their fathers and grandfathers could have only dreamt.
More and more mining opportunities in Peru mean more relocations need to be carried out. Most companies now support displaced locals across the mineral-rich country, by offering additional jobs in mining, or university scholarships for their children. Any other changes are also being undertaken to make the life of people living in rural Peru better.
They achieve the perfect model for responsible mining yet, but they continually take positive steps in that direction. The mining companies and the authorities both make sure that the Peruvian economy continues to grow without affecting the locals. These locals reside in mining areas or have to them move before such future projects. Foreign companies now make sure that the locals who stand to lose from such projects are given excellent opportunities so that it becomes a win-win situation for both parties.
If you are a foreigner and looking to conduct business in the Peruvian mining sector, you need to take into account all the policies regarding community support. You must provide solutions that are advantageous to everybody. Failing to do so can result in a severe backlash, damaging your image and reducing your profits. If you want to be a responsible miner in Peru, you must go through the Peruvian mining due diligence process. You make sure you know all the required laws before starting to mine there. It may seem minor, but it is the most crucial step you must take if you wish to run a successful mining company in Peru.
If you have any doubts regarding how to build a mine in Peru responsibly or any other queries related to your business needs, contact our 3E Accounting team of experts.
We will be more than happy to answer your questions and help you set up your mining business in Peru.