Anglo American agrees to earlier community payout in Peru after protests

LIMA (Reuters) - Anglo American PLC will spend some $30 million on community projects near its Quellaveco copper project in Peru three years earlier than planned after protests threatened to disrupt construction last week, a company manager said on Wednesday.

FILE PHOTO: The logo of Anglo American is seen on a jacket of an employee at the Los Bronces copper mine, in the outskirts of Santiago, Chile March 14, 2019. REUTERS/Rodrigo Garrido

Protesters in the southern region of Moquegua blocked a road to the Quellaveco deposit last week to highlight concerns about the $5 billion mine’s environmental impacts and to push for more jobs for local residents.

Eduardo Serpa, Anglo American’s sustainability manager in Peru, said the protests did not halt construction of the mine, which is now 25% built and on track to start operating in 2022.

But he said the protests led the company to double down on efforts to improve community relations.

In a deal with community leaders that ended a week of protests on Monday, Anglo offered to finance 100 million soles ($29.6 million) in short-term local development projects for communities in Moquegua this year instead of in 2022.

“What we’re doing is bringing forward what we’ve already committed to spending. We’d planned to spend 650 million soles on this in the operation stage, now we’re bringing 100 million of that forward to the construction stage,” Serpa said.

“With regards to the rest, we’re within the budgets set out for the project,” he added.

Serpa said Anglo has already invested $2 billion on Quellaveco, which Anglo bought in 1992. The deposit holds 7.5 million tonnes of copper and is expected to give a 20% return on investment, according to the company’s website.

Quellaveco has largely steered clear of the kind of stiff local opposition that has derailed other mining investments in Peru, thanks in part to a deal the company signed with local communities and President Martin Vizcarra when he was governor of Moquegua in 2012.

But in the past year, authorities and civil society leaders have pushed Anglo to provide more jobs to local residents, accusing it of failing to fulfill its 2012 commitments, a charge the company denies.

Last week, concerns about Quellaveco’s potential impact on a local river flared following demonstrations in the neighboring region of Arequipa against another copper project, Southern Copper Corp’s Tia Maria mine, which farmers oppose due to fears it will pollute their crops.

Serpa said that monthly talks with communities in Moquegua will continue to address demands for jobs and that government officials were traveling to the region to discuss the company’s environmental plan.

(This story has been corrected to change the portion of the project that has been built to 25% from 30% in the third paragraph)

Reporting By Mitra Taj; Editing by Marguerita Choy and Sonya Hepinstall