December 3, 2009 / 6:50 PM / 10 years ago

UPDATE 2-Violence erupts again over Chinese mine in Peru

* Two die, eight injured in shootout

* Peru has bitter conflicts over natural resources (Adds quotes, background)

By Terry Wade and Teresa Cespedes

LIMA, Dec 3 (Reuters) - Two people were killed and eight were injured in a shootout on Wednesday as Peruvian police tried to arrest a suspect for attacking a mining project owned by Chinese company Zijin, police said on Thursday.

Authorities said they arrested two suspects for the assault in November that killed three workers at the Rio Blanco copper development, but were fired upon as they tried to arrest a third suspect.

Zijin’s $1.4 billion Rio Blanco project has locked local communities and companies in a bitter environmental dispute marred by violence.

It has also put pressure on President Alan Garcia, whose approval rating is just 26 percent, to find a balance between luring foreign investment to oil and mining projects and protecting the environment.

“We were trying to arrest those responsible for what happened in November ... and we were attacked by bullets and rocks while trying to catch one suspect. We responded in legitimate defense,” General Walter Rivera told Reuters.

Rivera, who said police and civilians were among the wounded, said the suspect escaped during the shootout.

David Velazco, a lawyer for the victims, said police used excessive force. He said police were serving warrants for eight suspects in the November attack, but there were no warrants out for the arrest of the two peasants killed on Wednesday.

“The peasants didn’t shoot anybody. They don’t have arms, only arrows or maybe some rocks,” he said.

The company declined comment.

The government of Peru, a leading global minerals exporter, said it would investigate and that violence must stop.

“We won’t permit chaos. We’ll use all the tools the Constitution gives us to guarantee security and (prevent) attacks on public and private property,” said Prime Minister Javier Velasquez.

HISTORY OF VIOLENCE

The Rio Blanco development, 500 miles (800 km) north of Lima, Peru’s capital, is run by Monterrico Metals of Britain, which was bought by Zijin (601899.SS)(2899.HK) in 2007.

In 2005, one protester was killed and two dozen were beaten when townspeople mobilized against the mine, which they said would cause pollution and hurt water supplies.

In Britain, rights groups have filed a lawsuit against Monterrico over the 2005 clash.

Last month, 15 to 20 gunmen invaded the mining camp and set it ablaze.

Politicians have called it revenge for the 2005 clash or the work of drug traffickers. Rivera said he has yet to assign a motive for the attack, even though suspects were identified.

Garcia’s administration often tries to hurt the credibility of environmental groups by taking them to court or calling them terrorists. Human rights groups say he tries to play on the fears of Peruvians who remember the leftist insurgencies of the 1980s and 1990s.

An independent arm of the government that tracks social conflicts recently said that communities nationwide have organized to block 103 new mines or oil wells.

In June, three dozen people died near the town of Bagua, in Peru’s northern jungle, as police broke up roadblocks set by indigenous groups opposed to oil exploration on their ancestral lands.

Despite frequent conflicts over natural resources, Chinese miners Chinalco and Minmetals [CHMIN.UL] have also been investing in Peru.

Together, Chinese companies hungry for resources have pledged to invest at least $6 billion Peru’s mining sector.

Zijin’s mine, which would churn out some 200,000 tonnes of copper concentrate a year, was supposed to open in 2011 but has faced repeated delays. (Reporting by Terry Wade and Teresa Cespedes; editing by Jim Marshall) ((terry.wade@reuters.com; +51 1 221 2130; Reuters Messaging: terry.wade.reuters.com@reuters.net))

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