Peru Quadruples Copper Mining Concession to Monterrico

The approval was granted against the will of the local residents, who are planning a public meeting this coming Saturday to protest the decision on environmental grounds.

The Rio Blanco copper and molybdenum deposit is one of the largest undeveloped copper resources in the world. Monterrico plans to develop Rio Blanco as a conventional open pit mine, producing copper and molybdenum concentrates, saying that at planned production rates, Rio Blanco will be among the 20 largest copper mines in the world.

Monterrico mining camp at Henry Hill, in the Peruvian Andes, where the Rio Blanco mine is planned (Photo courtesy Monterrico)

The additional area granted to Monterrico comprises 27 mining concessions totaling 21,794.69 hectares located in the provinces of Huancabamba and Ayabaca in the Department of Piura. The newly approved concessions more than quadruple the original amount of land open to mining by Monterrico.

Monterrico's request for additional territory filed in April 2007 was approved by the Ministry of Defence on December 19, 2007, following a positive report from the Joint Chiefs of the Peruvian Army.

Formal approval was granted by way of Supreme Decree 024-2008-DE dated December 1, 2008 and published in Peru's Official Gazette on December 27, 2008 signed by Peruvian President Alan Garcia and members of his cabinet.

Because these concessions are located within 50 kilometers (30 miles) of Peru's border with Ecuador, special government approval was required for the acquisition.

The company says the newly approved buffer zone "ensures contained natural resources and the environment will be respected in accordance with company policy."

"The buffer zone guarantees the integrity of the ecological conservation area proposed for Rio Blanco which is considered a vital component of the current development plan for the project," Monterrico said in a statement December 30.

But the citizens of Ayabaca and Huancabamba are outraged by the government's approval and are planning to do what they can to pressure the government to cancel its decision.

The Collective in Defense of the Environment of Ayabaca, CODEMA, has called a strategy meeting of the directors of rural communities, local governments, environmental nonprofit organizations, workers' guilds and the general public for Saturday in Ayabaca.

Many local citizens believe that with Decree 024-2008-DE President Garcia has given away their community territory against the popular will. A public referendum on September 16, 2007 resulted in an overwhelming rejection of the mining project.

President of the Front for the Defense of the Environment, Agriculture and Life, Mario Tabra Guerrero remembers how President Garcia came to the Ayabaca town plaza on February 2, 2006 and said his government "will not permit any mine to take charge over Ayabaca."

"Today he is doing just the opposite," Tabra Guerrero told the local newspaper "El Tiempo, Piura."

Ecologist Craig Downer, an American who has spent decades studying the ecology of the Piura area, said Decree 024 is in direct conflict with a decision of the Peruvian Congress' Agrarian Committee in December to declare the cloud forests and paramos remaining in this area of the Piuran Cordillera "of special interest" to the nation.

Last month, the committee issued a directive that the government agency concerned with setting up ecological sanctuaries take steps to do so in the Piura area.

"The declaring of buffer zones is just another palliative to present to the public by the mining companies and the pro-mining factions in Peru, including the president, in order to proceed with the ecologically damaging, massive open pit, heap leach mining projects that cast such a dark shadow over the future of this exceptionally biodiverse region," Downer said.

"These mining projects will also place into serious jeopardy the water supply for a large portion of northern Peru and southern Ecuador," he said.

Thousands of farming families depend upon this river water to cultivate orchards of carob bean, mango, guava, chirimoyo, lemons and avocados, as well as rice, organic coffee and cotton, and many other fruits and vegetables.

"These mining projects will destroy and/or contaminate much of northern Peru's most important undisturbed cloud forests and paramos," said Downer, who is president of the Andean Tapir Fund, a nonprofit organization for the conservation of this endangered mammal.

Mountain tapirs still inhabit the area of the mining concessions, which Downer characterizes as Peru's "most important bastion for this species."

According to local sources, some illegal activity may be afoot to eliminate the endangered mountain tapirs from the mining concession area.

The prize - a chunk of native Piurian copper (Photo courtesy Monterrico)

Incorporated in the UK, Monterrico is a publicly traded international company with corporate headquarters in Hong Kong, and principal operations in Peru. On April 27, 2007, a Chinese consortium, Xiamen Zijin Tongguan Development Co. Ltd, acquired an 89.9 percent share in Monterrico.

The company's target date for first production at Rio Blanco is 2011.

In the first year of operation, the open pit mine will produce about 224,000 metric tonnes of copper, plus about 1,800 tonnes of molybdenum. Average annual production over the first five years of operation will be about 191,000 tonnes of copper and 2,180 tonnes of molybdenum.

The company plans to dry stack the mine tailings in a valley adjacent to the open pit. "This method has many environmental benefits including lower water consumption; ease of water recycling; reduction in the area of land disturbed," the company says on its website, adding that dry stacking allows rehabilitation and revegetation of the tailings site to be undertaken progressively, rather than at the time of mine closure.

Although the initial plan is to truck the concentrates from the mine to the port, a study for a concentrate pipeline has been developed to full feasibility as an option for the future.

The project will require the construction of 25 kilometers of new road, upgrading 176 kilometers of existing road and the erection of a 220 kilovolt power line to connect the project to Peru's national grid, a distance of 200 kilometers.

Storage and loading facilities are planned for the port of Bayovar on the Pacific Coast, some 800 kilometers north of Lima, which the company says is well placed for shipping the copper and molybdenum concentrates to smelters throughout the world.

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