Peru community sees 'progress' in resolving Las Bambas mine standoff

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LIMA, May 24 (Reuters) - The leader of a Peruvian indigenous community, whose protest led MMG's (1208.HK) Las Bambas copper mine to suspend operations over a month ago, said on Tuesday that "progress" has been made toward a solution to the crisis.

"We are moving forward thinking about the country at large, for the good of the mining project that is currently shut down," Edison Vargas, the leader of the Fuerabamba community told reporters, following a meeting with President Pedro Castillo in Lima.

The tone is the most conciliatory yet on the part of Fuerabamba, a community that was displaced to make way for the construction of Las Bambas, a Chinese-owned mine that accounts for 2% of global copper supply.

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Another meeting is set for Wednesday, Vargas and government representatives said. Las Bambas did not immediately respond to a request for comment.

Vargas and members of the Fuerabamba and neighboring Huancuire communities entered the mine in mid-April, resettling in the lands they once owned. While villagers from Fuerabamba were evicted soon after, members of the Huancuire community have managed to remain inside the mine, preventing operations from restarting.

In response to the eviction, Vargas said he wanted the mine to shut down for good, but on Tuesday toned down those comments.

Fuerabamba, Huancuire and four other communities on the perimeter of Las Bambas have since grouped together in a united front, alleging the mine has not honored all of its commitments with each group.

Peru is the world's No. 2 copper producer and Las Bambas accounts for 1% of the country's gross domestic product.

The suspension of operations at Las Bambas is a major issue for Castillo, a leftist president who came to office last year pledging to redistribute mining wealth in the country, boosted by massive support in mining regions.

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Reporting by Marco Aquino; Writing by Marcelo Rochabrun; editing by Richard Pullin

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