Engineering & Mining Journal

AUG 2018

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60 E&MJ • AUGUST 2018 MINING IN PERU "Quellaveco is a model for consensus building" Interview with Martín Vizcarra, President, Republic of Peru How can Peru establish the right condi- tions for the development of its mining project portfolio? Over the last years, we have learnt that we need to find the right balance between economic activities, respect for the environ- ment and an adequate relationship with the local populations. That balance cannot be achieved through a supreme decree; you can only get there through hard work and dialogue. In Peru, we already have several examples with very good results that serve as a model for project development. We also have projects trapped in difficulties because they have not been handled in the right man- ner by either the mining operator or the State itself. Therefore, we need to embark on a continuous improvement process. As previous governor of Moquegua, what were the lessons learnt from the dialogue table for the development of Quellaveco? The dialogue table of Quellaveco has been a model for consensus building that needs to be replicated in other projects. If Quellaveco finally goes ahead, it is going to be a very important project for Peru's economy, and even more important for a small region like Moquegua. There, a new challenge arises: the regional and local authorities need to be prepared to manage the tax money gener- ated by the project. Those funds should not be used to build irrelevant infrastructure, but to substantially improve the lives of all Mo- queguans. In the past, the money from the mining taxes has often been used to build large monuments or white elephants that do not bring progress for the population. Critics blamed the decentralization pro- cess for these past mistakes. Do you think Peru should continue its decentralization efforts? I am an advocate for decentralization. All de- cisions should be made closer to the popula- tions that are going to be affected by them. During the decentralization process, we have had good examples and bad examples. Those who defend a return to centralization only highlight the bad examples. Decentral- ization has its challenges, but the solution is not to go back to centralism. We need to strengthen the regional structure, identify and correct the problems. Also, we need the population to be educated, empowered and vigilant, to ensure that their authorities use their resources properly. Mining typically happens in remote areas. What is the role of the State in promoting the relevant infrastructure projects? My view is that large projects such as rail- way investments to support mining opera- tions should be mixed investments between the public and the private sectors. The pri- vate sector should contribute with the right percentage, according to the use that they are going to make of any particular infra- structure. There are some rail projects that are for social use for the whole community, and those should be fully funded and ex- ecuted by the State. However, when you have a project that goes directly to a par- ticular mine, that is a private project. ProInversión recently awarded the Mich- iquillay project. Do you think Southern Copper will be able to solve the community issues there, as well as in Tía María? Michiquillay was awarded in February, and the level of participation shows the great interest that mining investors have in Peru. The advice we can give from the State is that the operator should engage in an empathic relationship with the communities. We cer- tainly hope that any challenges will be over- come and that the project will be brought into production. With regard to Tía María, the project still presents some issues inher- ited from previous years, so it may take a bit longer, but with the right approach from the different parties, I am sure that any issues can be solved. What is your message to investors that want to develop mining projects in Peru? Peru offers enormous mineral wealth, and it is a country that opens its doors to for- eign investors. We are a welcoming country, and the only thing we ask for in exchange is respect to our idiosyncrasy. I am very opti- mistic because this new cycle of global eco- nomic growth sees Peru in a great position to make the most of it, in particular thanks to our mining potential. "Decentralization has its challenges, but the solution is not to go back to centralism" "This new cycle of global growth sees Peru in a great position to make the most of it" Interview was held in March 2018 in Mr Vizcarra's quality of Peru's vice-president.

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