MMG exploring annuity payouts as Peru's Las Bambas tensions continue
ca.finance.yahoo.com
Tue, July 26, 2022 at 9:11 a.m.·2 min read
LIMA, July 26 (Reuters) - Chinese miner MMG Ltd is exploring giving annuity-type payments to communities, as opposed to one-time payouts, as part of a strategy revamp following longstanding protests at its massive Las Bambas mine in Peru, executives said on Tuesday.
Las Bambas, one of the world's largest copper mines, has been besieged by escalating community protests since it opened in 2016, which culminated in a 50-day production shutdown earlier this year.
Peru is the world's No. 2 copper producer and Las Bambas alone accounts for 1% of the country's gross domestic product.
The mine and the dirt road Las Bambas uses to transport its copper are surrounded by impoverished indigenous communities who have often complained the mine has failed to benefit them financially.
"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.
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 spent, it encourages people to come back for more," Ross added.
MMG bought the Las Bambas project from Glencore, which devised the original community relations strategy.
The announcement is the clearest statement yet of what Las Bambas's strategy will be as it continues negotiations with protesting communities.
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.
"Las Bambas, I think, has reached a point where you cannot keep solving problems by making further commitments," said MMG's Executive General Manager Troy Hey.
Those protests have become more intense in recent months, threatening mine operations more often than in the past. The protests are also a headache for Peru's government, which depends on mining tax revenue. |
