July 12, 2012 / 3:59 PM / 8 years ago

Peru says deal reached on Anglo American mine

* Quellaveco would produce 220,000 T of copper per year

* Anglo American says community backs water plan

* Gov struggles with hundreds of natural resources conflicts

LIMA, July 12 (Reuters) - Peru has brokered a deal between the regional government of Moquegua and Anglo American to allow the global firm to build its $3 billion Quellaveco copper mine, Prime Minister Oscar Valdes said on Thursday.

Anglo American will make voluntary payments to communities near the mine of some $370 million during the mine’s 30 years of operations, said Valdes, who is struggling to resolve hundreds of social conflicts in Peru, including protests against Newmont Mining’s $5 billion Conga project in the northern region of Cajamarca.

“Yesterday (Wednesday), we resolved the issue of Moquegua and Anglo American with Quellaveco, it was a long negotiation with steep demands,” Valdes said on local radio.

Anglo American’s country manager Luis Marchese declined to comment. Marchese told Reuters on Monday the company had won crucial community support for its water plan and hoped to secure government approval to start construction soon in the southern region of Moquegua.

Quellaveco would produce 220,000 tonnes of copper per year, about a fifth of 2011 output in Peru, the world’s No. 2 copper producer. The project’s environmental impact study was approved years ago, but community opposition has delayed its development.

Brokering a deal on Quellaveco would mark a small victory for Valdes, who has been sharply criticized for failing to resolve the dispute over Newmont’s project in Cajamarca. Five people have died in clashes with police this month.

Political opponents say Valdes and President Ollanta Humala have been too quick to suspend civil liberties and back mining firms over citizens. Valdes has called the protesters in Cajamarca “extremists” and blames local officials for inciting violence for political gain.

Anglo American expects to break ground on Quellaveco later this year and construction would take 44 months.

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