Peru Cabinet meeting ends with no word on Las Bambas mine crisis

LIMA (Reuters) -Peru’s Cabinet met on Friday to try and find a truce to the ongoing conflict that has paralyzed operations at MMG Ltd’s Las Bambas copper mine, but ministers left in the afternoon without announcing a decision.

Las Bambas executives were summoned to meet with government officials at 7 p.m.

Mining operations at Las Bambas – which supplies 2% of world copper and accounts for 1% of Peru’s gross domestic product – have been at a standstill since April 20 because of protesting members of the indigenous Huancuire community who have settled inside company property.

Late on Thursday, left-wing lawmakers from the ruling Peru Libre party presented a bill to nationalize copper production in Peru, the world’s No. 2 copper producer, including troubled Las Bambas. The bill is unlikely to go through in the current conservative-led Congress.

Leftist President Pedro Castillo led “an extraordinary session of the Council of Ministers to address the situation and the problems of the Las Bambas mining project,” according to a government statement issued in the morning.

Defense Minister Jose Luis Gavidia said he was ready to launch a military operation that would remove the protesting communities and reopen the mine, but that this needed Cabinet approval.

“A military and police intervention needs to take place to restore the rule of law,” he told local news outlet Canal N. “We are ready to intervene.”

The Las Bambas conflict, which has already left 3,000 without jobs, worsened this week after a fire broke out in part of a mine camp following clashes between police and community members. The company blamed the protesters, but the community of Huancuire denied any involvement in the fire.

The Huancuire are demanding higher benefits from the mine, saying the Chinese operators have not honored all of their commitments to the local indigenous community.

Castillo’s government has struggled to appease protesters since taking office last July. Castillo was elected with massive support in mining regions amid pledges to better redistribute mining profits.

(Reporting by Marco Aquino; Writing by Steven Grattan; Editing by Marguerita Choy and Sandra Maler)