Las Bambas: mining crisis, agreements, state of the invaders and how many losses they cause to the country

A new crisis is facing mining in our country after the conflicts that occur in Las Bambas, after a group of community members invaded the spaces of this company located in the city of Apurímac. According to the representatives of these communities in the Chalhuahuacho field, the failure to comply with the commitments made with the Executive has caused them to invade these camps as a form of protest.

Despite the fact that last Wednesday, there was a meeting between the community members, the mining company and representatives of the Executive, no progress was made, as the protesters demand “a table of concrete solutions”. According to the regional governor of Apurímac, Baltazar Lantarón, the community members ask for the presence of the Minister of Energy and Mines and the Prime Minister as guarantor for April 25, in Chalhuahuacho.

Given this, Infobae Peru exclusively obtained a detailed report from the mining company Las Bambas itself, which explains the entire economic and social crisis that has arisen in the face of the paralysis of its operations and the constant clashes with the communities.

BACKGROUND

On April 14, approximately 130 people from the Fuerabamba community invaded lands of Minera Las Bambas (MLB), alleging an alleged breach of commitments. This invasion led to the temporary arrest of mining operations from that very day, in order to safeguard the health and integrity of its workers and the community members. MMG Limited, which owns MLB, announced the cessation of copper concentrate production from April 20, as long as the invasion continues.

After this new conflict, the miner ratified that it is complying with the commitments signed with the community of Fuerabamba. Thus, the company has recorded 264 social investment commitments, of which 143 have been fulfilled and accredited, 66 are up to date in execution as they are recurring every year and 55 are scheduled to be executed in the coming years. These are projects of an agricultural nature, capacity-building, communal infrastructure, local employment, entrepreneurship, education, land replacement and health).

They also explained that from 2019 to date, a Dialogue Table between the Fuerabamba community and MLB is still active, with the participation of PCM and MINEM as guarantors of compliance with the commitments, to whom MLB has provided all the evidence that proves their full compliance.

However, the company rejects illegal coercive measures that threaten the health of its workers, the integrity of its assets and the sustainability of the business. Nothing justifies the illegal action of an invasion of your private property as a measure of force.

Under this premise, the mining company highlights that it has invested more than S/ 95.9 million in the development of social projects in the Fuerabamba community between 2010-2022 in different areas of development, mainly education and health, with which EI Fuerabamba students have achieved an improvement significant in learning achievement and in reducing anaemia and chronic child malnutrition in recent years, above the regional average.

OVER 180 HECTARES

Nueva Fuerabamba comprises 441 homes and 21 non-residential buildings that house a school, health center, and social infrastructure such as market, community center, home for the elderly, craft center, stadium, among others, as a social infrastructure with all the necessary public services to guarantee the quality of life of the inhabitants and their customs.

Given this, they point out that, as part of the resettlement agreement, MLB acquired and transferred to the Fuerabamba Community, 5 properties for a total area of more than 4,200 hectares in strict compliance with the provisions of the Exchange Agreement signed between the Community and MLB on November 23, 2011 , with investments exceeding S/ 8 million.

On February 3, 2022, MLB held a meeting in Cusco with the community's Board of Directors, agreeing on an operational plan of meetings to fulfill the commitments and, in March, the community provides a list of issues that it considers to be outstanding commitments related to land.

To date, the dates of meetings with the community have not been specified to discuss the first issue, to define the characteristics of the 180 hectares to be acquired or compensated.

ECONOMIC IMPACT OF LAS BAMBAS

More than 92% of the transfers for mining concepts to the Apurimac region correspond to Las Bambas.

After this, they say they maintain an agreement with the Peruvian government for the payment of 32% as income tax, even though the current corporate income tax rate is 29.5%.

Then, they detail that the Apurímac region has received S/ 1.511 million to date as transfers for contractual royalties from Las Bambas (3% of monthly sales).

In 2021, Las Bambas generated tax profits for the first time, so in 2022, the Apurimac region will receive S/ 314.5 million in Las Bambas Mining Canon, when an MLB Income Tax payment of S/628.9 million was recorded as a 2021 fiscal result. According to national regulations, the Mining Fee represents 50% of the Income Tax, as detailed in the report

In this regard, they detailed that in January 2022, the Ministry of Economy and Finance (MEF) transferred S/ 143 million to the Apurimac region as an advance of Canon Minero de Las Bambas for fiscal year 2021, with the transfer of the final balance pending for the month of June, according to the transfer schedule for these resources.

CONCERN FOR SNEAKERS

The Peruvian Chinese Chamber of Commerce expressed concern over the recent stoppage of copper production at the Las Bambas mining company due to the invasion by a group of community members of Fuerabamba and Huancuire, which could lead to the closure of operations of the mining company, according to its statement.

“Our country requires leaders who provide quick and lasting solutions for the social and economic benefit of each family. The economic losses that harm an entire nation must not be allowed to continue,” the message says.

“We urge the National Government to make swift decisions to evict illegal invaders, otherwise there will be greater situations of instability that continue to damage the national economy. Let's remember that mining is one of the most important productive activities in our country that generates economic and social development for all of Peru,” he emphasized.

WHAT YOU SHOULD KNOW:

Las Bambas is the third largest copper producer in the country in terms of production capacity. Its value represents 1% of the country's GDP, 78% of Apurimac's GDP and 9% of national mining GDP (Macroconsult Study).

The workforce of Las Bambas reaches 8,000 workers between payroll and contractors. Of these, 28% come from the Apurimac region and 21% from Cusco.

Between 2016 and 2021, the operation of Las Bambas allowed the acquisition of goods and services from suppliers in Apurímac and Cusco for more than S/ 1,495 million, which have gradually increased.

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