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Displaced by mining, Peru villagers spurn shiny new town

Displaced by mining, Peru villagers spurn shiny new town
From Reuters - December 6, 2017

NUEVA FUERABAMBA, Peru (Reuters) - This remote town in Perus southern Andes was supposed to serve as a model for how companies can help communities uprooted by mining.

Named Nueva Fuerabamba, it was built to house around 1,600 people who gave up their village and farmland to make room for a massive, open-pit copper mine.

The new hamlet boasts paved streets and tidy houses with electricity and indoor plumbing, once luxuries to the indigenous Quechua-speaking people who now call this place home.

The mines operator, MMG Ltd, the Melbourne-based unit of state-owned China Minmetals Corp, threw in jobs and enough cash so that some villagers no longer work.

But the high-profile deal has not brought the harmony sought by villagers or MMG, a testament to the difficulty in averting mining disputes in this mineral-rich nation.

Resource battles are common in Latin America, but tensions are particularly high in Peru, the worlds No. 2 producer of copper, zinc and silver. Peasant farmers have revolted against an industry that many see as damaging their land and livelihoods while denying them a fair share of the wealth. Peru is home to 167 social conflicts, most related to mining, according to the national ombudsmans office, whose mission includes defusing hostilities.

Nueva Fuerabamba was the centerpiece of one of the most generous mining settlements ever negotiated in Peru. But three years after moving in, many transplants are struggling amid their suburban-style conveniences, Reuters interviews with two dozen residents showed. Many miss their old lives growing potatoes and raising livestock. Some have squandered their cash settlements. Idleness and isolation have dulled the spirits of a people whose ancestors were feared cattle rustlers.

It is like we are trapped in a jail, in a cage where little animals are kept, said Cipriano Lima, 43, a former farmer.

Meanwhile, the mine, known as Las Bambas, has remained a magnet for discontent. Clashes between demonstrators and authorities in 2015 and 2016 left four area men dead.

Nueva Fuerabamba residents have blocked copper transport roads to press for more financial help from MMG.

The company acknowledged the transition has been difficult for some villagers, but said most have benefited from improved housing, healthcare and education.

Nueva Fuerabamba has experienced significant positive change, Troy Hey, MMGs executive general manager of stakeholder relations, said in an email to Reuters. MMG said it spent hundreds of millions on the relocation effort.

Mining is the driver of Perus economy, which has averaged 5.5 percent annual growth over the past decade. Still, pitched conflicts have derailed billions of dollars worth of investment in recent years, including projects by Newmont Mining Corp and Southern Copper Corp.

To defuse opposition, President Pablo Kuczynski has vowed to boost social services in rural highland areas, where nearly half of residents live in poverty.

But moving from conflict to cooperation is not easy after centuries of mistrust. Relocations are particularly fraught, according to Camilo Leon, a mining resettlement specialist at the Pontifical Catholic University of Peru.

Subsistence farmers have struggled to adapt to the loss of their traditions and the very urban, very organized layout of planned towns, Leon said.

It is generally a shock for rural communities, Leon said.

At least six proposed mines have required relocations in Peru in the past decade, Leon said. Later this month, Peru will tender a $2-billion copper project, Michiquillay, which would require moving yet another village.

EVERYTHING IS MONEY

MMG inherited the Nueva Fuerabamba project when it bought Las Bambas from Switzerlands Glencore Plc in 2014 for $7 billion.

Under terms of a deal struck in 2009 and reviewed by Reuters, villagers voted to trade their existing homes and farmland for houses in a new community. Heads of each household, about 500 in all, were promised mining jobs. University scholarships would be given to their children. Residents were to receive new land for farming and grazing, albeit in a parcel four hours away by car.

GHOST TOWN

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