Mining

China’s MMG Considers Annuities for Peru Copper Mine

 

Chinese mining company MMG might offer annuity payments to indigenous communities in Peru as it seeks to resolve longstanding disputes over its massive copper mine.

The Las Bambas project is surrounded by impoverished indigenous communities who have often complained the mine has failed to benefit them financially.

MMG said it would explore paying annuities to communities instead of one-time payouts. Las Bambas, one of the world’s largest copper mines, has been besieged by escalating community protests since it opened in 2016.

This year it was forced to shut down for 50 days.

Peru is the world’s No-2 copper producer and Las Bambas alone accounts for 1% of the country’s gross domestic product.

“We’ll be trying to look at annuity and royalty type schemes where the payments continue for a number of years,” Ross Carroll, MMG’s chief financial officer, said in a call with analysts.

 

Many Communities Have Not Received Compensation

While the mine has given significant payouts to some communities, especially those closest to its operations, many have not received contributions.

“What we inherited and we continued with was a series of lump-sum type of payments which, obviously, lump-sum money can get spent. And once the money is spent, it encourages people to come back for more,” Carroll added.

MMG bought the Las Bambas project from Glencore, which devised the original community relations strategy.

A month-long truce ended last week without new agreements, and with communities demanding that the mine engage in new commitments that have yet to be announced.

 

• Reuters, with additional editing by George Russell

 

 

READ MORE:

Inflation Fears Ease on Falling Prices of Copper, Commodities

China’s Zijin Invests in Mongolia Copper and Gold Deposits

Copper Waste Could Yield Cobalt, Say Researchers

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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