Resource conflict erupts in Peru days before vote

Tue Apr 5, 2011 11:32am EDT

* One dead, 20 injured in clash with police

* Mining project would require $1 billion

* Peru dogged by conflicts over natural resources

By Terry Wade and Marco Aquino

LIMA, April 5 (Reuters) - Farmers opposed to Southern Copper's $1 billion Tia Maria mine said on Tuesday they would boycott Peru's presidential election unless the mining company abandons its project and police stop attacking protesters.

Their demands came hours after a clash that killed one protester and injured 20 and put new focus on widespread conflicts over the control of Peru's natural resources ahead of Sunday's election. Two presidential candidates urged calm.

The front-runner in the presidential race is a left-wing nationalist, Ollanta Humala, who favors a greater role for the state in tapping Peru's mineral resources.

Peru, one of the world's fastest-growing economies and a major global minerals exporter, has lined up about $40 billion in mining and oil projects for the next decade. But more than 100 rural towns have mobilized to stop projects they fear would take scarce water supplies or cause pollution.

Clashes from nagging conflicts often turn deadly and critics say the government has been an ineffective mediator. More than 30 people died in 2009 when police broke up a protest by indigenous groups in the Amazon opposed to oil and logging.

"We aren't going to vote unless the miner leaves our town," said Jaime de la Cruz of a citizens group in Islay, 620 miles (1,000 km) south of Lima, the capital. Voting in Peru is compulsory and people who refuse to vote can be fined.

"The government must understand we want to take care of our own lives," he said on local TV.

PROJECT STALLED

Peru's mining ministry has tried for months to broker an agreement by calling in an agency from the United Nations to help evaluate the environmental impacts of the mine and telling the miner to pump sea water up from the Pacific Ocean instead of using local river water to help run its mine.

But a deal has not been struck and last week Southern Copper's (SCCO.N) chief executive Oscar Gonzalez said he was putting the project on hold for at least one year because of the conflict. [ID:nN29299135]

Southern Copper, one of the world's largest copper producers, is a unit of Grupo Mexico (GMEXICOB.MX).

"We need to be very careful," said former President Alejandro Toledo, who is tied for second in the presidential race. "We are sponsors of foreign and national investment. It is welcome, but extractive companies don't have a blank check to pollute rivers and forests."

Former Prime Minister Pedro Pablo Kuczynski, also tied in second place behind Humala, called for restraint.

"I'm asking everyone for a one-month ceasefire so that an agreement can be reached," Kuczynski said. "However, if at the end of the day the people don't want a mine, then they won't have a mine, so I ask for calm and unity."

Humala, who favors raising taxes on mining companies and has said more natural resources should be put in the hands of the state, has yet to comment on the farmers' demands.

For full campaign coverage see [ID:nVOTEPE], for factbox on recent polls [ID:nPOLLSPE]. (Reporting by Terry Wade and Marco Aquino; editing by Anthony Boadle)