{"id":34149,"date":"2016-07-27T14:22:00","date_gmt":"2016-07-27T14:22:00","guid":{"rendered":""},"modified":"2020-10-08T15:15:25","modified_gmt":"2020-10-08T15:15:25","slug":"9149-peru-s-new-government-wants-more-mining-more-china","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/pollution\/9149-peru-s-new-government-wants-more-mining-more-china\/","title":{"rendered":"Peru\u2019s new government wants more mining, more China"},"content":{"rendered":"

Peru\u2019s new president Pedro Pablo Kuczynski (known as PPK), has revealed his government\u2019s intention to prioritise mineral extraction and trade relations with <\/span>China<\/a> in a series of actions and public statements. Since his victory<\/a> in an election run-off on June 5, Kuczynski has also declared the need for Peru to stimulate further economic activity by processing and refining minerals, in addition to simply exporting them.<\/p>\n

China is Peru\u2019s biggest investor. With this in mind Kuczynski, who will replace the outgoing Ollanta Humala at the end of the month, described as \u201cnecessary\u201d a trip to China ahead of the Asia-Pacific Economic Cooperation (<\/span>APEC<\/a>) forum in Lima in November, his first official overseas visit. \u201cChina is our number one trading partner and they are the ones who purchase our minerals,\u201d he said.<\/p>\n

\u201cWe are an economy of enormous natural resources, but we have to industrialise and that is not easy to do. So we will have to work with those who buy significant amounts of our exports, which to a large extent, means China,\u201d Kuczynski said during the 11th Business Summit of the Chile-Pacific Alliance in Lima in June.<\/span><\/p>\n

Peru\u2019s relations with China date back many years before the latter\u2019s wave of trade and investment deals with other South American countries, and have strengthened in recent years. However, three major mining projects \u2013 R\u00edo Blanco in northern Piura region, Toromocho<\/a> in the Central Andes, and Las Bambas<\/a> in the Apur\u00edmac region \u2013 each have unresolved social conflicts, according to the ombudsman (Defensor\u00eda del Pueblo).<\/p>\n

\n

\nChinese investments are welcome, but they have to comply with environmental standards<\/p>\n<\/blockquote>\n

Jos\u00e9 Luis L\u00f3pez Follegati, an expert on mining and social conflicts said<\/span>: \u201cChinese investments are welcome, but they have to comply with the standards of environmental and social responsibility in Peru. The state can\u2019t just decide to promote investment [in mining] without first consulting with local communities.\u201d<\/p>\n

Las Bambas requires investment of US$5.8 billion and L\u00f3pez Follegati expressed optimism about roundtable discussions aimed at getting the state to prioritise the development of the area. One of the main causes of conflict at Las Bambas is the lack of job opportunities beyond the initial construction phase. L\u00f3pez Follegati pointed out that only 15% of the state investment programme has been carried out and local residents are demanding that it do more. There are currently four or five mining projects in existence in the area, improving the connectivity of which could offer more employment opportunities.<\/span><\/p>\n

The future of investments<\/strong><\/p>\n

China is not simply Peru\u2019s principal mining investor. As of last year, it has partnered with the Peruvian government in the controversial project to construct an 8,000 kilometre railway<\/a> that would traverse South America and better connect Peru\u2019s Pacific ports with the Chinese port of Tianjin<\/a>. Various civil society organisations have warned about the environmental impact on Amazon forests. Technical studies have not been been carried out to determine the viability of the megaproject.<\/p>\n

But according to Peruvian newspaper El Comercio<\/a>, which had access to the memorandum of understanding to build the railway signed in 2014, assessments are the responsibility of China Railway Corporation and China Railway Engineering Eryuan Group (for China), Brazil\u2019s Corporate Planning and Logistics Company, and Peru’s Highways and Railways Department, which reports to the Ministry of Transport.<\/p>\n

The total value of bilateral trade between Peru and China currently stands at some US$15 billion. The two countries signed a free trade agreement on March 1 2010. Kuczynski reiterated the need to strengthen these ties and to promote the processing of minerals. However, one of the main metallurgical complexes in the country, <\/span>La Oroya<\/a>, is currently in receivership and was responsible for one of the most serious incidents of lead contamination in Peru.<\/p>\n

Pointing to the copper refinery at Ilo on the Pacific coast, L\u00f3pez Follegati said that Peru has the capacity, technology and experience to process minerals: \u201cPeru has gleaned at least 30 or 40 years\u2019 experience in processing minerals. But more could be done if one could extract more products such as copper, silver and zinc.\u201d However, L\u00f3pez Follegati acknowledged that La Oroya \u201cneeds to be modernised, and to answer for its environmental policies\u201d.<\/span><\/p>\n

Different perspectives<\/strong><\/p>\n

In recent years, Peru\u2019s growth has slowed from 6% per annum to an estimated 3% this year, according to<\/a> the International Monetary Fund\u2019s World Economic Outlook report. There are various explanations for this fall, but the consensus is that it is associated with the fall in international commodity prices<\/a> and China\u2019s economic slowdown<\/a>.<\/p>\n

\u201cWe are primarily an exporting country,\u201d said Waldo Mendoza of the Catholic University, Lima. \u201cWhat we have seen in recent years are the leftovers from that bonanza era, because the investments made in those earlier years have matured in 2015 and 2016. What is happening now is a period in which that engine has shut off, and looks like it will be shut down for an extended period,\u201d he added.<\/span><\/p>\n

Kuczynski said he wants to improve growth rates by reactivating mining investments. However, the opposition Frente Amplio (Broad Front), the leftist coalition that obtained 20 seats in congress in the elections and which supported Kuczynski\u2019s candidacy against Keiko Fujimori in the runoff, has a different view on the economic model that the new government should prioritise.
\n\u200b
\nTania Pariona, a Frente Amplio congresswoman, insists that it is time for the Peruvian economy to stop focusing on growth based on the extraction of minerals: \u201cThe country needs to make a realistic projection of its investments taking the limits of the environment into account, respecting life and other products coming from the communities where resources are extracted,\u201d she told <\/span>Di\u00e1logo Chino<\/em><\/a>, chinadialogue<\/em>‘s sister site, adding; \u201cwhat future is there for economic growth if human development is not taken into consideration?\u201d
\n\u200b
\nPariona stated that in order to resolve ongoing <\/span>social conflicts<\/a>, companies and the state needed to \u201cstrengthen mechanisms of dialogue with communities\u201d and in good faith. \u201cThis is fundamental and we have said it on various occasions. The state must have a more timely and effective presence in the areas where conflicts arise.\u201d<\/p>\n

The Frente Amplio has said that it will be introducing a legislative initiative to revoke a series of measures known as the <\/span>Paquetazo ambiental or \u201cenvironmental package\u201d (Paquetazo refers to the shock neoliberal economic reform packages introduced in some Latin American countries in the 1980s and 1990s) which aims to incentivise investment through weaker regulations. Among other issues, the reforms would make environmental audits more flexible.<\/p>\n

When contacted<\/span>, Kucznski\u2019s technical team refused to comment officially on these matters, as did representatives of the majority party Popular Force, led by Keiko Fujimori. For his part, Lopez Follegati insisted that \u201cit is important to strengthen Peru\u2019s Environmental Assessment and Enforcement Agency<\/a> (OEFA) and the use of new and better technologies and environmental guarantees, but sanctions must also be imposed\u201d.<\/p>\n

A former economy minister from the political right wing, Kuczynski\u2019s Peruanos Por el Kambio party has only 18 seats in congress and it will be difficult for his government to implement its new agenda. <\/span><\/p>\n

On November 2, Peru and China will celebrate 45 years of diplomatic relations and on November 19, Kuczynski will host the APEC Forum 2016, attended by President Xi Jinping.<\/span>In the coming weeks, Kuczynski will announce his cabinet but for now, his attention is on China with key dates in the coming months. <\/span><\/p>\n

This article was originally published here<\/a> on Di\u00e1logo Chino<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Peru’s new president to expand into mineral refining as conflicts over jobs and\u00a0environmental standards rumble on, reports Nelly Luna\u00a0<\/p>\n","protected":false},"author":2525,"featured_media":58873,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[760],"tags":[547,566],"hashtags":[],"country":[],"class_list":["post-34149","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pollution","tag-fossil-fuels","tag-mining"],"acf":[],"yoast_head":"\nPeru\u2019s new government wants more mining, more China | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Peru's new president to expand into mineral refining as conflicts over jobs and\u00a0environmental standards rumble on, reports Nelly Luna\u00a0\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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