Wednesday 23rd September 2020

Resource Clips

A perspective on Peru

Panoro’s Luquman Shaheen talks about social concerns, political policies and copper

by Greg Klein

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Even before the conference with President Ollanta Humala, Canadian Prime Minister Stephen Harper’s Peruvian visit included a May 22 meeting with mining executives in Lima. Among them was Glenn Nolan, president of the Prospectors and Developers Association of Canada, who urged the PM to press Humala to unlock some $4 billion of unspent royalties earmarked for regional spending. Nolan, who’s also Noront Resources’ TSXV:NOT VP of aboriginal affairs and a former chief of Ontario’s Missanabie Cree First Nation, told Canadian Press, “We want to see good laws and transparency so that our (royalties) go back into the community.” At least by implication, he drew attention to powerful community concerns that have sometimes resulted in deadly clashes. Speaking to ResourceClips, Panoro Minerals TSXV:PML president/CEO Luquman Shaheen discussed Peruvian social issues and public policy, as well as his company’s Cotabambas and Antilla copper projects.

According to Reuters, anti-mining protests caused about 200 deaths during the term of former president Alan Garcia and at least another 24 since Humala gained office in 2011. Shaheen emphasizes, however, that “social issues differ not just by region but from valley to valley, from community to community. Throughout Peru the social issues are very local issues related to employment, land use, water use, etc.”

Panoro’s Luquman Shaheen talks about social concerns, political policies and copper projects

Barely visible near the centre of the photo,
blue tarp marks a Cotabambas drill site.

Cotabambas and Antilla, about 100 kilometres apart in southern Peru, each face different local concerns. But, Shaheen says, “the issues at both our projects are very progressive, very manageable. We have agreements signed with all the communities at both our projects—socio-economic, development agreements where we commit to employment, investment into education, health care, agricultural projects. Although there’s been news about social issues at some projects in Peru, there’s dozens, if not hundreds of others where the issues are very well managed.”

He adds, “As for the political issues, if you look into the details, I think you would be hard-pressed to find a national political environment that is more pro-mining, more pro-development or more pro-private investment.”

The country’s pinning part of its economic strategy on a plan to double copper output by 2016, making Peru once again the world’s second-largest producer. To do so, the government’s actively encouraging the industry in three key areas, he says.

Soon after taking power, Humala replaced Peru’s royalty regimen with one based on operating margins. “It’s a very progressive decision in which governments and companies share the risk of potential decline in margins, as commodity prices soften or as costs increase,” Shaheen explains.

A second development suggests some progress on the issue PDAC discussed with Harper. “The central government collects revenues from the mining sector and is obliged by statute to re-invest those revenues in the regions that produced the mining revenue,” says Shaheen. “The regional governments have lacked the infrastructure and the institutional strength to invest that money into projects. The national government has taken on a number of projects to assist the re-investment of those revenues into road projects, railway projects, other community infrastructure development. It takes time, but you see from the national government a very pro-active approach to the inequality of the regions.”

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