OBG talks to Oscar González Rocha, President and CEO, Southern Copper Corporation (SCC)

Interview: Oscar González Rocha

How easy is it to implement the new regulations on community relations and environmental studies?

OSCAR GONZÁLEZ ROCHA: The private sector’s response to the country’s regulatory environment has always been the same. We will abide by the regulations, but the government needs to ensure they are clear in the way they are written and the way they are enforced. It is only with a stable regulatory regime that the country will continue attracting investment in the sector.

Concerning community relations, the Law on Prior Consultation has been signed, but it is not clear how it will be implemented or at what development stage the consultations are meant to occur. This must be clarified. The law is extremely relevant for proposed large-scale mining and energy investments in the jungle regions, which are dotted by indigenous and native communities. To facilitate continued investment in projects in these areas, the regulations must be clarified.

The same can be said of the environmental impact assessments (EIAs). According to a recent presidential decree, these will be moved from the Ministry of Energy and Mines (MINEM) to the Ministry of Environment. Although no issues had previously been reported, there was some concern about MINEM’s objectivity given it is also responsible for promoting investment.

The most important thing is ensuring effective communication between the industry, the government and local communities. Everyone stands to benefit from increased investment in mining projects, not only the companies. The government gains increased tax revenues from new expansions and projects, while local communities see greater employment opportunities.

What has the private sector’s response to the ongoing issues with the Minas Conga Project been?

GONZÁLEZ: Despite what is claimed by many journalists, the current situation with Minas Conga is much more political than mining-related. What it boils down to is a difference of perspective between the national government and the regional government. We expect that the current disagreements will eventually be resolved and that the project will continue to make progress.

It is very important that this happens because it is a huge project with a significant potential benefit for the entire country. Should the project be discontinued, it would be a very bad signal to future investors. This would not affect the mining companies already in the country, as they have invested heavily and there is obviously no way to transfer a mine to a different country. However, it would have a negative impact on new projects and firms that are considering new investments in Peru, as it sets a precedent for the types of difficulties which companies may potentially encounter.

It is essential that Peru realises it is competing with many other countries that are also trying to boost investments in their mining industries. While Peru and Chile continue to be the main mineral producers in Latin America, countries like Ecuador and Argentina are also looking to cash in, and thus it is essential to remain an attractive destination for investment.

In what ways can the country fill the current human resources gap in the mining industry?

GONZÁLEZ: The deficiency of talent in the industry is serious and it is preventing it from developing to its full potential. There is a shortage at every level, from metallurgists to engineers to geologists. While projects have been multiplying and growing in size, there has not been a parallel growth in the pool of personnel. This has created a situation in which mining companies are constantly competing with each other for new workers as well as to keep the workers they already have, at both a national and international level.

To address the situation, the private sector is partnering with educational institutions to ensure that more universities offer these types of courses, and we are working to spread awareness of the opportunities in the sector. Finally, we are endeavouring to strengthen internship and apprenticeship programmes so that graduates have the necessary skills for the industry.

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The Report: Peru 2014

Mining chapter from The Report: Peru 2014

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The Report

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