Peru faces mining problems under the leadership of the left-wing president

Like his local activists, the 49-year-old Guillermo made a request on the grounds of waterway pollution, which the miners dismissed, and he put forward a more difficult argument: his land in Ayakucho is sacred. There is no place to dig for gold and silver. "

"it's like destroying your temple, your faith," he said in an interview.

His approach has never been popular in Lima-until now. With the inauguration of President Pedro Castillo (Pedro Castillo), a rural activist from the Marxist party, in July, Guillermo had a strong ally, and last month the government unexpectedly announced that the licenses for four precious metal mines in Ayakucho (Ayacucho) would not be renewed. Hochschild Mining Plc's share price plummeted.

Then the government seemed to turn under pressure from the mining industry and conservative parties, saying it could allow the mines to be extended. There are growing protests in other parts of the country, one of the main suppliers of copper, zinc and silver, and miners say their future in Peru, the darling of the emerging market, looks gloomy.

Raul Jacob, director of the Peruvian Mining Association and chief financial officer of Southern Copper, said: "companies are beginning to doubt whether it is worthwhile to stay in Peru." he pointed out that "even if one conflict is resolved, it is only a matter of time before another conflict breaks out. There is no solution to the fundamental problem.

The mining battle in Ayakucho is a flashpoint for the new government and global metals markets that rely on Peru's rich deposits to meet growing demand during the transition from fossil fuels.

Castillo has avoided an impeachment attempt by opposition MPs. He needs to appease the more moderate factions of Peruvian politics, which softens his attitude towards resource nationalism.

Social contradictions intensify

But this is a delicate game. He needs the support of tougher factions in the party and the rural voters who put him in power. Ayakucho community groups have threatened to resume the protests.

Under Castillo's leadership, social conflicts are on the rise across the country. The mining industry blamed part of the blame on his government's right to protest on other priority issues, such as free transport. This may also be due to a pandemic and higher expectations for the new government.

The mining industry says the problem begins with inefficient spending on the tax funds it generates. In remote areas with poor services and infrastructure, mines can become de facto local governments, making them an easy target for complaints.

Although Glencore Plc and Hudbay Minerals Inc. Recently brokered a deal to resolve community conflicts in Peruvian mines, but MMG Ltd. Operations are being halted because people living 200km (125 miles) away want greater benefits. In October, there were 148 conflicts in Peru.

Including a mine that was set on fire.

A further deterioration in community relations could have far-reaching implications. The mining industry employs about 240000 people directly in Peru, accounting for 62 per cent of exports last year and 8.8 per cent of GDP.

The pipeline for mining projects is more than $50 billion, according to government data, as companies are looking for higher-quality and lower-cost deposits than those on the southern border of Chile. For copper, these investments are essential to help meet the expected growth in demand for the transition to clean energy and transport.

Convincing people that mining is a boom rather than a threat could determine the future of the industry.

Ayakucho's activists will need a lot of persuasion.

Guillermo believes that environmental damage and cultural erosion are intertwined. It was part of the Inca trade route before his father and uncles sold the land of silver gold, now run by the South American Mining and Investment Corporation. Now that the ancient barter practices and archaeological relics have disappeared, the spiritual significance of the region is in jeopardy, he said.

Guillermo said: "the springs and hills are like a god-that's why we worship the hills." the mountain disappeared with the arrival of the mining company. "

Locals say they keep finding dead fish and cattle, and some villages can no longer drink their streams.

Ayakucho's main mine operator said they acted responsibly and complied with the relevant regulations. Hochschild's shares fell 28% on the trading day after the authorities agreed to waive the license, and it vowed to defend its rights. Cia. Minera Apumayo said it had good relations with local communities, condemned violence by other politically motivated groups, and urged authorities to investigate pollution allegations, adding that rivers naturally contain minerals.

Meida-Vaiva (Medita Huayhua), who leads the anti-mining campaign in Chavina, about a three-hour drive from Guillermo's Breapampa town, disagrees. She blamed the upstream Apmayo mine for polluting her town's water source under heavy rain, leading to a high incidence of anemia and cancer among residents. People in the nearby town of Sanks expressed similar concerns.

The president said the mining company located at the head of the basin will withdraw. " "We hope he will keep his promise," said Huayhua, who has had breast cancer surgery.