Hudbay wants us to believe that their $US 1.8 billion project Constancia in Peru is ramped up and at full production as we speak.
What Hudbay doesn’t want us to know is that there is major obstacles and opposition to all mining companies in the country. Opposition that has reduced production dramatically, and to the point that they are no longer producing at all. Some companies have abandoned them all together.
According to the Ministry of Energy and Mines, the total value of mining projects in Peru is valued at a staggering US$63 billion.
However, the total value of projects currently suspended – for various reasons but in particular those where there have been serious conflict is well over US$25 billion.
This is 40% of all mining companies in the country that are no longer in production!
There are some 20 projects currently suspended and suffering major delays. Here are some to name a few.
MINAS CONGA, a copper/gold mining project valued at US$4.8 billion, in Cajamarca. It has been suspended two years ago because of localized protest.
TIA MARIA, in Arequipa, a large open-cast copper project, involving an investment of around US$1 billion. Facing widespread opposition from local farmers of the region, work on the project is currently suspended. There has been a month long strike.
MICHIQUILLAY, also in Cajamarca. Our former parent company, Anglo American announced last year it was abandoning their project due to the drop of metal prices and to the large degree of conflict in the region. This comes at a loss of US$2 billion.
As we scroll down the long list, we find CONSTANCIA, in Cuzo, where the concessions are owned by Hudbay and involves an investment of US$1.8 billion. They are undergoing delays due to local protesters.
Local residents are sick of the empty promises that were made to them by theses mining companies. They will not tolerate the environmental impact theses mines are having to their land and waterways. They will not stand for it, and are starting to shut theses companies down.
The dockworkers at Port of Callo have walked off the job in an indefinite strike. This is Peru’s largest port. With no workers, ships do not get loaded or unloaded.
Hudbay relies on ships to transport their product to their customers throughout the world. They do not get paid by their customers till they receive their product. With no workers to load the ships, they don’t get paid.
How long are shareholders willing to wait for a return on their investment?
More realistic, how long can Hudbay smokescreen them?
There is a real chance that Hudbay will have no choice but to abandon their project as so many companies before them have.
Who is gonna pay for this 1.8 billion dollar mistake?
Your Bargaining Committee