PERU: China's state-run mining company Chinalco is building a modern town for the residents of Morococha, a village high in the Peruvian Andes that will be demolished to make way for a $2.2 billion copper mine

Record ID: 602797

  • Title: PERU: China's state-run mining company Chinalco is building a modern town for the residents of Morococha, a village high in the Peruvian Andes that will be demolished to make way for a $2.2 billion copper mine
  • Date: 3rd July 2012
  • Summary: CHILDREN LEAVING THEIR HOMES TO GO TO SCHOOL VARIOUS OF CHILDREN ENTERING SCHOOL
  • Embargoed: 18th July 2012 13:00
  • Keywords:
  • Location: Peru
  • Country: Peru
  • Topics: Business,International Relations,Industry
  • Reuters ID: LVAB0OEMNLOXJ69EUY1LUQYDSIIU
  • Story Text: In the snow-capped peaks of the Peruvian Andes, a Chinese mining company is putting the finishing touches on a brand new town that will welcome 5,000 residents next month to replace a nearby community it will demolish to make way for its $2.2 billion Toromocho copper mine.
    Outside a camp for miners, an extraction machine moves huge piles of earth and rock. When the new city is finished later this month, residents of the ramshackle town of Morococha, nearly 15,000 feet above sea level, will have access to amenities they have long lived without, including modern housing and water, sewage and electricity systems.
    China's state-run Chinalco calls the $50 million town the biggest privately-funded social project in Peru's long mining history. It may help the company avoid community opposition that has stalled other projects across the country, including U.S. miner Newmont's $5 billion Conga project in the northern Andes.
    "This new city is being developed across 63 hectares of land. Forty-three hectares will be built up, we have around two hectares of green space and we are building 1,050 homes from six basic designs for renters and owners. We are also building 25 additional structures, including schools, health centers, a police station, coliseums, all the installations of a modern city," said Juan Alvarez, the new city's superintendent of public works.
    Foreign mining corporations have been accused of running roughshod over workers and poor towns in Peru and other developing countries in the past.
    Some residents of Morococha are wary of Chinalco's promises.
    Victoria Taipe and her five children have lived in Morococha for a long time and said she is already running into red tape with Chinalco. When she attempted to enroll for Chinalco housing, she was told it was too late, she explained.
    "Some people say Chinalco is taking advantage of us, that the new houses aren't so secure," she said.
    To begin the process of relocation, Chinalco bought 320 of Morococha's 400 homes, paying the 1,200 households an average of $8,400 for their properties.
    Rebeca Antonio, who lives in Morococha with her daughter and granddaughter, said the company has fallen short on its obligations.
    "They gave us very little for our houses. It's not a large enough amount for us to buy houses elsewhere, nor to buy land," Antonio said.
    Other residents are reluctant to leave the old mining town where they grew up and raised their children.
    Carlos Monge is a political analyst in Lima. He says multinational mining companies are beginning to realize their responsibility to local populations affected by their business.
    "There are some in management positions who realize they cannot continue mining like they did in the past. They can't show up, make a hole, take out the riches and go without worrying about the immediate impact and the strategic impact in the area. I do think that there is a group of companies that are conscious of this and that are improving their corporate behavior as it relates to residents," Monge said.
    Some experts say that if Chinalco can persuade residents of Morococha to move to the new town that is 15 minutes away by car, it could change ideas about corporate responsibility as President Ollanta Humala struggles to resolve hundreds of social conflicts that threaten $50 billion in pledged mining investments.
    Chinalco started construction on the mine in May 2011. When it is up and running, the Toromocho mine is expected to produce some 250,000 tonnes of fine copper a year.
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