Peru, Bear Creek in talks on controversial Santa Ana silver mine

LIMA Thu Oct 3, 2013 5:49pm EDT

LIMA Oct 3 (Reuters) - Peru's government has restarted talks with Bear Creek Mining Corp over the Canadian company's stalled Santa Ana silver project and hopes work on the mine can resume, the mines minister said on Thursday.

"We hope that the Santa Ana issue, which is in the judiciary, can be resolved as soon as possible so the silver deposits can be exploited," Mines Minister Jorge Merino told reporters. "The government is very willing to facilitate untangling the project."

He said the administration of President Ollanta Humala wanted to reach a "friendly solution" through dialogue with the company.

Bear Creek was nearing construction on Santa Ana in 2011 when deadly protests against the project led outgoing President Alan Garcia to withdraw permission for the company to operate in the area.

Bear Creek has challenged that revocation in local courts and has said it would sue Peru in an international tribunal under free trade protections unless it could recover the right to proceed with Santa Ana.

The company has said that starting up Santa Ana in southern Peru was its top priority because it could help finance its more expensive $700 million silver project, Corani.

Last week, the government approved the environmental and social impact assessment for Corani, which is near Santa Ana.

It was unclear whether local residents, who once staged large protests against Santa Ana because of fears the project would pollute water supplies, could be convinced to support it.

Merino said the Humala administration's emphasis on environmentally responsible mining and dialogue with communities would help ease opposition.

Peru is rife with social conflicts over natural resources. Anti-mining protests in recent years have derailed Newmont Mining Corp's $5 billion Conga gold mine and Southern Copper's Tia Maria copper project.

Bear Creek expects Santa Ana to produce some 5 million ounces of silver per year and Corani to produce about 13 million.

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