IMIDER, Morocco, Feb 29 (Reuters) - On a recent chilly night, Brahim Udawd gazed from the top of a hill at a brightly-lit mine below.
"That's the curse plaguing our land," he said, pointing to the Imider mine. "It was discovered in the seventh century. I don't think life here changed much since those medieval times . "
The Imider mine, on the eastern slopes of the Atlas mountains in Morocco, is the world's seventh biggest producer of silver. For the communities around it, some of the most impoverished in the country, it is the biggest source of income within a 280-mile (450-km) radius.
But instead of welcoming the mine, many local people resent it as a symbol of how Morocco's wealth is concentrated in the hands of a privileged few while the rest of the population live in poverty.
Hundreds of villagers from the Imider area were angry enough that in August they cut off the flow from a well which supplies water to the mine. Since then they have camped on the hilltop by the well to make sure it is not turned back on.
The drop in water supply caused the mine a 40-percent loss of processing capacity. Shares of developer Imiter Mettalurgic Co (SMI) fell 15 percent from their peak this year on the Casablanca bourse after it announced the protest's impact. Precious metal traders on the other side of the world wanted to know what was happening.
For Udawd, who dresses in a brown woolen jalabba gown and is one of the leaders of the protest, it is simple: "We are fighting for dignity and a fair share of our land's wealth."
Morocco's King, Mohammed VI, shrewdly took the sting out of mass protests last year inspired by the "Arab Spring" by proposing reforms that should allow greater democracy and letting moderate Islamists, in opposition for years, lead the new government.
But the stand-off at the mine shows that unrest driven by anger at poverty and income disparities is still bubbling, and has the potential to damage the economy.
The Imider mine is especially symbolic because a major shareholder, through a series of other shareholdings, is Morocco's monarchy, the largest private stakeholder in the $100-billion economy and the institution at the top of the moneyed ruling elite.
The mine is not unique, however. Across the country there are regular bouts of protests -- sometimes spilling over into riots -- against poverty, official corruption and the perceived failure of the state to help.
A common grievance is that businesses get away with fleecing workers or polluting rivers because they belong to the "Makhzen," a secretive network of court officials, businessmen and advisers which can act with impunity because it is close to the royal court.
The protesters at Imider accuse SMI of depleting water acquifers, creating pollution and doing too little to improve living conditions in the area.
It is not hard to see why.
In villages near the mine, poverty stands at an official 19 percent, against an national 9 percent average. Some people live on only $1.50 a day -- one tenth of the minimum wage paid at the mine.
A short paved road that connects the mine to the main national road ends abruptly at the mine's entrance, leaving a long network of rough dirt tracks connecting six villages near it.
With a population of around 6,000 people scattered over seven villages, the Imider area has one dispensary that employs one nurse. SMI built the facility but it is often closed due to what residents say were repeated burglaries.
"A pregnant woman here has to travel at least 100 miles to Ouarzazate's hospital to give birth." said Ahmed Sadqi, a member of parliament for the Tinghir province which includes Imider. "It's not fair for a province (Tinghir) the size of Lebanon."
"There is extreme marginalisation and exclusion. The imbalance has reached a revolting scale," said Sadqi. "That must change."
Fatima, a schoolteacher in Ikis Amezdar, one of the seven villages near the mine, said many of her pupils walk for up to two hours to reach school.
"Some live three km away and others (walk) nine km. Too many of them can't afford to buy pens and books," said the veiled teacher in her late 20s.
"The weather here is ... very harsh and there is no water and no electricity. But last year, we had mobile network coverage brought in," she added.
The mine operator says it has spent between 1 and 2 million dirhams ($90,000-$180,000) each year to fund development in the region over the past few years.
The problem is that people in the area had unrealistically high expectations about what the firm could provide, said Abderrazak Gmira, who heads the precious metals department at SMI's parent company, Managem, the country's biggest metal miner.
"The protest is led by a group of youths who claim to represent the local population," Gmira told Reuters at the mine site. The protest, he said, is "motivated by economic and social grievances that have accumulated over the past years. Of course we can help solve these problems but we can't do it alone.
"We have to put the mine in its regional context and not think only of a few villages," he said.
He denied allegations the mine was depleting local water supplies and also denied SMI caused unlawful levels of pollution. He said the company has not yet been certified as meeting the ISO 1400 standards on environmental management but expected to receive the certification within a year.
"We apply international standards that govern the industry," he said. "We are well aware of our responsibility vis-à-vis the environment and we believe strongly that prevention is always better than cure."
Sadqi, the MP, said Morocco's environmental protection laws were a shambles.
"A draft law was issued in the 1990s but it has not yet been implemented," he said.
Chakib Laroussi, a spokesman for the royal cabinet, declined to comment on the situation at the mine and said any questions should be referred to the company.
All Mustapha Bedri knows is that his apple trees no longer bear fruit. A farmer who has lived in the area for 25 years, he blames the mining.
"SMI is responsible of course," he said, although he had no concrete proof. "Its shareholders take the wealth of the region instead of spending it on development."
For Bedri, the fact that the royal family is an indirect shareholder in the mine leaves him a little perplexed.
"The king is our father, isn't he? A father takes good care of his own, no?"