Friday, October 31, 2008

Peru's latest bout of social unrest: what you need to know

By popular demand (bit of shadenfraude perhaps?) here's a quick rundown on the protests in Peru's southern Tacna region being reported by all the press this morning and why it has protests going on and

1) Southern Copper's two big Peru mines, Toquepala and Cuajone, are situated in the two regions of Tacna and Moquegua respectively.

2) Toquepala has been producing at full speed this year, but Cuajone has been undergoing strip work and stuff and revenues from that pit have consequentially dropped.

3) Therefore the Tacna region has been getting more money from the government royalty program than Moquegua.

4) Moquegua hasn't liked this for a long time, and last week put together its second big strike/protest/roadblock in the last couple of months. The reason was to pressure Peru's Congres into passing the new royalty law that spreads the cash around more evenly amongst regions.

5) The law got passed. Therefore Moquegua received a dose of happiness and Tacna got all pissed.

6) Result: one unblocked bridge in Moquegua and one burned gov't building in Tacna.

Bottom line: for the first time in ages I feel sympathy towards the Twobreakfasts administration and also say that the regions (esp Tacna) are acting like spoiled brats here. The alterations to the royalty law mean that mining money will get spread around more evenly, but the people in Tacna are doing a foot-stomping act. This isn't some sort of new Bolivia uprising, it's greedy people squabbling over money. That's all.