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Southern Copper (NYSE: SCCO) and the government of Peru have launched a dialogue process to address the ongoing conflict between the Tumilaca-Pocata-Coscore-Tala farming communities and the Cuajone copper mine.

The action follows a request by more than 5,000 workers at Cuajone, who asked the Executive to mediate.

The negotiation table, whose creation was made official through resolution Nº 008-2022-PCM/SGSD, will be led by the Secretariat of Social Management and Dialogue of the Ministers’ Council Presidency. Its main goal will be to facilitate agreements between the mining company and community members, whose demands involve a $5-billion compensation for the use of their lands and a transfer of 5% of the miner’s annual profits.

The dialogue table is set to be installed by May 5, 2022, at the latest, and will be operative for an initial 45 days. Once this period expires, the Ministers’ Council Presidency will have 30 days to present a final report on what has been achieved.

Prior to this agreement, on April 21, 2022, community representatives signed a deal committing to a 15-day truce that involved lifting their blockade at Cuajone, which had forced a suspension of production for more than 50 days.

Their two-month-long protest, which started when Southern Copper decided to replace a 50-year-old water pipe that supplies nearby communities, also involved the closure of the Viñablanca water reservoir that serves the Cuajone mine camp and the blockade of the railway that transports copper ore to the port of Ilo.

To deal with the protest action and restore mine operations, the Peruvian government sent its army, dismissing as “irrational” the financial demands of nearby residents. 

Located in the southern Moquegua region, Cuajone is Southern Copper’s second-largest mine in Peru. In 2021, it produced 170,000 tonnes of copper.

Peru, on the other hand, is the world’s second-largest copper producer after Chile and is also a significant silver and zinc global supplier.