PROTESTS IN LAS BAMBAS COPPER MINE : A wealth redistribution issue ?

Since late 2021, protests are occuring in the copper mine of Las Bambas in the Apurimac region. It is not the first episode of protests the mine owned by the chinese government backed company MMG is facing, since protests already happened back in 2015 when the mining project began, deplacing the Fuerabamba community from their lands. Nowadays, they are block roads to/from the mine, or are taking over infrastructures, occupying it, and then blocking the production. 

The community complain about the lack of compensation they received after being forced to relocate. Promises were made about the development of infrastructures in their area or more broadly, a fair compensation from the mine profits redistribution.

Who is responsable for this ? It is difficult to say. 

Other mines officials believe the fault is mainly the Government's. They argument that the mine gave out enough of its profits, and that the problem is not about them not redistributing, but more about how the money they gave have been managed and processed by the State. 

However this argument can be heard, even missmanaged, such quantities of money should still allows some development projects to emerge. Considering passed missconduct, we can only be suspicious of corruption or at least public fund embezzling. Also, it is always an easy way for private companies officials to criticize the way a State manages his money, particularly when it's a socialist stamped government, to descredit this very government and to redirect the fire of criticism they should receive. (imo) 

Anyway, whoever the responsibles for this are, the Fuerabamba community is left behind, as so many before her in those kind of project. This time, as they did from the beghining, they decided to stand up for themselves, and to claim money from the exploitation of the gold from the bench they used to sat on (metafphorically).

https://www.miningweekly.com/article/peru-community-rejects-joke-offer-to-end-las-bambas-copper-mine-protest-2021-12-13

https://www.reuters.com/business/hk-listed-mmg-cease-copper-operations-peru-mine-2021-12-03/

https://www.reuters.com/markets/commodities/peru-mining-protests-risk-clogging-53-bln-investment-pipeline-industry-warns-2022-05-17/

https://www.bbc.com/news/world-latin-america-61161250

https://www.reuters.com/world/americas/peruvian-mine-protesters-reject-talks-until-emergency-order-lifted-2022-05-03/

Gold at any cost- Discussion group

 

Environment pollution in Peru

In this article González Gustavo talks about the pollution in the air, water and health that affects Peruvians with the variation of the climate. Since 2,300 premature deaths per year have been detected in Lima, another problem that the Peruvian population pollutes the air by burning tires And garbage in the streets and it doesn't know that it destroys a country that has a lot to give, another contamination is the water that waste is thrown into the rivers or the sea and the mining that destroys the lakes in the towns of the Sierra and produces diseases such as cholera or malaria.

                 

F.Gonzales, G. (31 de Marzo de 2014). Obtenido de              http://www.scielo.org.pe/pdf/rins/v31n3/a21v31n3.pdf.

http://www.scielo.org.pe/scielo.php?pid=S1726-46342014000300021&script=sci_abstract&tlng=en

VIDEO CONTENT : The environmental disaster caused by the illegal gold mining activity in Peru

This documentary brought by the entomologist Phil Torres, the environmental biologist Marita Davison and the former CIA analyst Lindsay Moran, was aired in 2017 on the Al Jazeera English youtube channel. The main subject is the illegal gold mining activities going on in the region of “Madre de Dios” in the South-Eastern part of the country. The rainforest ecosystem is devastated by illegal miners, looking for gold in the region's soil. This activity has a huge impact on the environment, in addition to the public health question raised by the mercury poisoning of the region’s waters, affecting the locals but also all the people living from its resources, even hundreds kilometers down the rivers. All that being said, we can consider this issue as a new “blood diamond” episode, except this time it is about gold, environment and public health more than diamonds, war and massacres. 
Enjoy your viewing !

Gold at any cost: Illegal mining in Peru | TechKnow

Al  Jazeera English

Al Jazeera English (2016). Gold at any cost: Illegal mining in Peru [Video]. YouTube. https://www.youtube.com/watch?v=ttBK0RyN2Qo&ab_channel=AlJazeeraEnglish

 

ARTICLE : Local Content Policies In Minerals-Exporting Countries: The Case of Peru (a 2017 OECD note)

This article from the Organisation for Economic Co-operation and development focuses on the exports of raw-materials from Peru, especially the mining industry. It is interesting and truly relevant to this blog since it puts the light on the ties between this economic component and Peru’s global economy. It also brings a whiff of an answer on its general effects on social and societal questions in the country.

OECD note on Peru's minerals exports

PODCAST: Por las rutas de la curiosidad

 We are happy to share this incredible podcast that is gonna helps us understand why Peru is the way it is nowadays teaching us about its history. Please feel free to leave us comments about the podcast and if you enjoyed it.

Was Peru rich back in the XIX century? Were there a lot of poor people ?

 In the nineteenth century in Peru, the wool economy bore many fruits in the country. It all started in the year 1854 until 1860 the export of alpaca wool achieved an annual average of 8% and following the course in the year 1911 until 1919 they managed to reach 13% per year.

Alpaca wool in the 19th century reached the lands of England, Germany (Hamburg), and the United States. They were raw materials in the textile industries.

It's undeniable that Peru had and still has a considerable percentage of poverty but Peru is in fact a rich country, full of resources.

One of those natural resources that had so much relevance in the nineteenth century was the saltpeter, this resource was highly requested due to its importance in the gunpowder fabrication and its big use as a fertilizer in agriculture, so big countries such as Great Britain and their big magnates started to set saltpeter houses in Peru, in order to export it abroad.

Its importance and rentability were such that even the border countries to Peru such as Chile and Bolivia started to claim pieces of territory where the saltpeter was on a big amount as their own. Also Bolivia and Chile had some differences in Bolivia’s territory and its resources too. And sooner than later they would all get involved in a huge historic event known as the war of the Pacific.

However even if Peru was extremely rich thanks to its various resources, this was not reflected in the Peruvians. But poverty in Peru has declined rapidly since the beginning of the 21st century, due to the prosperity of the international market, tourism, low inflation, greater economic opportunities, and neoliberal economic policy, at one of the lowest rates.  fastest in South America.  Poverty fell from 58.7% in 2004 to 20.5% in 2018, from 14.9 million people living in poverty to less than 6.8 million people in 2018, with millions of Peruvians leaving the poverty according to the Instituto Nacional de Estadística e Informática (INEI).  In 2019, the poverty rate further decreased by 1.7%.

Brown R. (2013, May 18). Saltpeter, The mother of gunpowder. Historical Association the Voice of History. Retrieved from https://www.history.org.uk/historian/resource/6431/saltpeter-the-mother-of-gunpowder

The Guano Era : Case study of a wasted opportunity

 From the years 1840’s to 1870’s, Peru held a huge economic opportunity, owning a monopoly on a very high value and demanded product which is guano. What everyone of us wouldn’t consider as more than bird’ poop, was actually used as a fertilizer for agriculture all around the world back in the days. 

Here is a golden bench. 

The Peruvian State was originally the owner of guano’s deposits, and found investors to bring the capitals to exploit this opportunity. President Castilla then set up the consignment system, which consisted in allowing private actors to exploit the guano in exchange of a pourcentage between 30% and 45% of the sale, after the sale. 

During those years, the Peruvian State achieved to reimburse a lot of its tremendous debts and to develop its infrastructure of transportation but mainly around the objective of the commercialization of guano. 

Even though the Guano became the primary source of tax revenue for the State, it appears that Peru didn’t get the best of it, firstly after the rise of the prices unanticipated by the government who signed fixed prices contracts with private exploitant, and then because the consignment system didn’t fit the State needs for an immediate cash flow in order to reimburse its debts. 

That is what will push the Prado government to contract with the french financer Auguste Dreyfus. This contract put an end to the consignment system, and gives Dreyfus the right on every exportation of guano in exchange of an advanced payment from the financier. 

Unfortunately, when the international need for guano decreases after the discovery of other means of fertilization, Dreyfus refuses to pay the Peruvian government and soon won’t reconduct this contract. 

This situation highlights the mismanagement of this opportunity from the Peruvian State. First, the peruvian state didn’t really get the best price out of it anytime they needed it, and this is mainly because of the urgent need for cash from the State. Indeed, the money raised by this activity directly went to the reimbursement of the country’s debt, and to develop infrastructure for its own exploitation, missing the opportunity to diversify its income through diversified investment or to develop the public sector. Therefore the wealth guano brought to the country did not runoff well to the people, not seeing any benefits from it, not to mention the terrible living conditions of the workers. In addition to that, the government based its revenue nearly only on the exploitation of guano, which makes the state vulnerable and subject to any kind of decrease of prices or demand. This phenomenon will later be called the Dutch Disease, and is an example of what a country shouldn’t do in order to develop itself sustainably. In the same way, it is very well known for companies to not rely on a single customer nor supplier. It is the same for a country, since, like for the Dutch Disease, relying on a single actor makes the State vulnerable, in case of the departure of this customer or else. And it is exactly what will happen with Dreyfus. 

In other words, the guano era can be considered a wasted opportunity.