Peru halts Canada mining operations amid protests

LIMA (AFP) ?€" Peru suspended a Canadian company's mining project in the south of the country on Saturday, following intense negotiations in the wake of deadly protests by mostly indigenous anti-mining activists, authorities said.

The government enacted five laws including the revocation of a concession granted to Bear Creek Mining Corporation, which has been a focus of weeks of protests, including an attempt by hundreds of demonstrators Friday to storm an airport in the south of the country.

The president's chief of staff and Peru's Justice Minister Rosario Fernandez said the new laws, published in the official gazette El Peruano and which include a 36-month halt to all new mining concessions in Puno province, are aimed at satisfying the demands of locals opposed to mining activity in the region, state news agency Andina said.

At least five activists were killed when riot police fired tear gas and live ammunition to keep protesters from taking over the airport in the southern city of Juliaca, in Puno.

The violence comes in the final weeks of the presidency of Alan Garcia, who hands power to leftist president-elect Ollanta Humala on July 28. Garcia is leaving so many unsolved social problems that Humala recently pleaded with him to address the most pressing issues and "not give us a mine field."

Business leaders criticized the move, with Alfonso Garcia Miro, president of Peru's Foreign Commerce Society -- Comex Peru -- saying the the new laws were "a bad sign for investors."

"We've had a bad political time (recently) and the worst thing we can do is to give a sign that Peru is against investment," he said."

Others commentators slammed the Lima government for buckling, and warned of the precedent it set.

"The government should not yield to this pressure" from protesters, insisted former interior minister Fernando Rospigliosi, in comments to the Peru21 newspaper.

"Surely other departments (provinces) will follow suit, and Peru will be without mining," he added.

The province of Puno has been in the grips of a wave of protests against mining projects in the region, led primarily by indigenous Aymara people, the majority ethnic group in this part of the country.

Activists have demanded an end to mining activity and oil drilling in Puno, one of Peru's poorest areas, insisting the operations pollute the land and waterways, leave few local benefits, and that the concessions were granted without consulting local interests.

For three weeks in May, protesters blocked vehicle traffic between Peru and Bolivia, and then cut off all access to the city of Puno, population 120,000, for a week. Protests have since spread to the provinces of Azangaro, Melgar and now the city of Juliaca.

The mining protests began as a demand to revoke a silver mining concession granted to Canada-based Bear Creek Mining Corporation in the community of Santa Ana.

They then expanded to include opposition to other area mines, and now include opposition to the Inambari project, an ambitious plan to damn several Andean rivers and build what would become one of the largest hydroelectric power plants in South America.

Peru is the world's largest silver producer, the second largest zinc and copper producer, and the fifth largest gold producer.

Bear Creek says the Santa Ana project's proven and probable silver reserves stand at 63.2 million ounces.

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