This lake in the Peruvian Andes, once the water supply for farms and villagers, is drying up after Newmont's Yanacocha mine drained its water. Photo: Gabriel Rinaldi / Bloomberg Markets

By Michael Smith
12 February 2013

(Bloomberg Markets Magazine) – People streamed into the central square in Celendin, a small city in the Peruvian Andes, the morning of July 3, 2012. They were protesting the government’s support for Newmont Mining Corp.’s plan to take control of four lakes to make way for a new gold and copper mine. By midday, there were 3,000.

Some hurled rocks at police and brandished clubs. Then assailants shot two officers and an Army soldier in the leg.

Blocks away, construction worker Paulino Garcia left home on foot to buy groceries. As he approached the central square, he encountered chaos. People ran for cover as federal troops fired their weapons, Bloomberg Markets magazine will report in its March issue.

One bullet struck Garcia as he watched the mayhem. It ripped open his chest and exited through his back. The 43-year- old father of two fell to the ground and died. Another three people were shot and killed, and more than 20 were wounded.

It was the deadliest clash in 18 months of protests in Peru’s Cajamarca region, where many residents say Newmont’s $5 billion Conga mine will take water their villages and farms need to survive.

“He died in a pool of blood,” says Adelaida Tabaco, Garcia’s widow, 38, sobbing inside her half-built adobe house in Celendin. “The only thing the people want is water for families, but the mining companies want to take it. And soldiers will kill if you get in the way.”

The injured and dead in Celendin, 800 kilometers (500 miles) north of Lima, are victims in a continent-wide conflict that pits South American governments and big, often foreign- based companies against people who stand to lose their homes as water is diverted to industrial uses.

Leaders across the region, elected on promises to fuel economic growth and lift their populations out of poverty, are fast tracking water-use approvals for projects like the Conga mine. Helped by mining and agriculture exports, Brazil’s gross domestic product increased 43 percent from 2002 to 2012, after adjusting for inflation, while Chile’s economy grew 58 percent.

Peru is on target to expand 6 percent in 2013, the fastest pace in South America, driven by investments in gold, silver and copper mines.

South America has more water than any other region on earth, with 29 percent of the world’s reserves, according to the United Nations Food and Agriculture Organization. The rub is that the water isn’t always where the best mineral or agricultural resources are located.

Mines consume huge amounts of water to separate minerals from rock. It takes 28 liters (7.4 gallons) of water to make 0.5 kilogram (1 pound) of copper in Chile. After processing, the water at some mines is so toxic that it can’t be reused. Peru’s biggest mines, such as Conga, are high in the Andes, where there’s almost no rain from May to October.

In Chile, the world’s largest copper producer, vast deposits of copper, gold and silver lie under the Atacama Desert, which is so dry that rainfall has never been recorded in some places. And higher demand means there’s less water to go around.

Growing populations have pushed the amount of usable water per person down by more than one-fifth since 1992 in Brazil, Chile and Peru, according to the UN group.

National leaders in Latin America are weighing short-term economic growth against the public’s future needs for water, and the consequences can be deadly. In Chile, the nation’s drinking supply is threatened by past policies of allotting too much water to companies to spur the economy, Public Works Minister Loreto Silva says.

Water is already running out in places like Copiapo, a city of 158,438 people in the Atacama Desert, 800 kilometers north of Santiago, because of mining and agricultural expansion, she says.

“In some areas of the country, like Copiapo, we have a reduction or an exhaustion of the resource,” Silva says. “If we don’t make decisions today, we’ll be short of water in about a decade. That forces us to take a long-term, strategic view in terms of water.” [more]

South Americans Face Upheaval in Deadly Water Battles



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