Anglo American and communities reach social agreement for development of Michiquillay copper project in Peru
05 June, 2008
Anglo American is pleased to announce that it has reached agreement with the communities of Michiquillay and La Encañada in relation to the development of the Michiquillay copper project in Peru.
- The agreement was the result of consensus, dialogue and participation.
- Anglo American will start the development of the Michiquillay project with a commitment to pay $403 million over 4 to 5 years and to invest a minimum of $38 million during the exploration stage.
During an assembly meeting held on 3 June, a substantial majority of the people from the eight sectors of the Michiquillay Community approved a social agreement with Anglo American. This decision was the result of an open, transparent and democratic process, through which they expressly gave their approval for the company to start the development of the Michiquillay project.
This agreement is in addition to the one approved by the La Encañada Community on 23 May. Anglo American has now received the acceptance of the two communities in the area of direct influence to start the development of the Michiquillay project.
The content of both social agreements is the outcome of participative work by the members of the communities of Michiquillay and La Encañada, and agreed with Anglo American's official representatives. Through these agreements, the communities have undertaken, together with the company, to build and maintain an environment of dialogue, respect and harmony, for the development of the mining project.
These will serve as framework agreements for the relations between the parties and include aspects of sustainable development such as the establishment of a Community Development Foundation, environmental issues such as the creation of participative monitoring committees and the execution of an environmental base line study and a detailed study on soil usage before starting exploration activities.
It should be recalled that the General Assembly summoned on 24 May to approve the social agreement in the Michiquillay Community was suspended at the voting stage and was subsequently rescheduled in agreement with the community authorities for 3 June.
Timothy Beale, General Manager of Anglo American Michiquillay, said that respect was one of the principles that stood out throughout this participatory process. “We are very respectful of the communities' decisions, which is why we have only entered their territories once the people and their representatives have given their agreement”, he said.
Additionally, he indicated that the company will continue working with the communities in the zone of direct influence of the project, in order to continue generating consensus towards the project.
Beale said that, thanks to being granted this social licence, the company is able to move on to the exploration study stage, which is expected to last four to five years and will entail a minimum exploration investment of $38 million. The company will determine the economic, technical and environmental feasibility of the project based on these studies.
Anglo American will pay $403 million for the mining concession, of which half, $201.5 million, has been promised by the State towards the creation of a Social Fund to undertake development projects for the direct benefit of the communities of Michiquillay and La Encañada.