Peru’s progress

Commentary

— The following is an edited version of a speech by Peruvian President Alan Garcia Perez at a ceremony in late October to open Southern Peru Copper’s new copper smelter in Ilo, Moquegua.

There are four reasons why we have made sure to accompany Southern Peru Copper in this ceremony. The first is to highlight for the whole country the amount and destination of the investment that has been made here — more than US$500 million in the modernization of this refinery, which is the largest project and the largest environmental investment ever made in Peru. This proves that a modern corporation respects the environment and incorporates its respect for the environment in its costs.

This is why all Peruvians must know that the most important investment in favour of the environment has been made here: maintaining the country’s productive capacity. The investment of US$563 million represents new furnaces that capture 92% of the sulphuric acid, and 26,000 tonnes of concrete and 8,000 tonnes of steel frames, and will enable Southern Peru to increase its production to 300,000 tonnes of copper and obtain 1.15 million tonnes of sulphuric acid annually.

And, as part of this environmental project, there still remains the construction of a pier nearby, which will allow sulphuric acid to be shipped without it having to pass through the city of Ilo.

This is significant. So much so the Ministry of Energy and Mines must support it once the environmental impact assessment is completed; because it is evident that the human impact should take precedence over the environmental impact, and if the purpose of building the pier is to avoid sulphuric acid passing through the population of Ilo, what more do officials and employees need to approve the construction of this pier? I expect that it will be approved to encourage more investments, and this is the second reason why I am here.

The board of directors of Southern Peru has approved an investment of US$2.1 billion to commence the Tia Maria project, to perhaps double the capacity of the plant’s refinery and increase refining and production capacity by 80%. We welcome the US$2.1 billion, we receive it with open arms because it means work, because it means progress and because once again, the Chilean daily El Mercurio will have to write that Peru keeps getting closer to Chile, and that we are going to reduce the advantage it has over us in relation to copper, thanks to these investments that we are going to support; because they come accompanied by respect for the environment, respect for the workers, and more revenues and better quality of life for the population.

Nobody can doubt that when there is a technologically powerful and economically sound corporation with the resources to respect the environment and distribute good salaries, the population progresses. Exactly 30 years ago, I was in Ilo accompanying (Peruvian political leader) Victor Raul Haya de la Torre and the Ilo of that time was absolutely different from today’s Ilo. Ilo is the No. 1 city in Peru in terms of urban development. It is not the largest, but it has the largest number of paved streets, it is the city that has better utilities, and further construction continues day by day. That is what we want for Peru on the whole, that is why we promote mining — that is why we reject the demagoguery that claims that mining cannot coexist with nature or the human being.

Among all the provinces of Peru, Ilo ranks fourth together with Tacna with respect to child mortality. When it comes to child malnutrition, it ranks sixth among the 190 provinces, which is what happens when a mining company with resources — not an irresponsible and informal mining company — but rather a true corporation, associates with a city, and both prosper and move forward.

Those who are against modern mining should come here and see; those who claim that mining cannot coexist with agriculture should came here and accompany us to see the hills of Ilo becoming green again, and that none of these four furnaces operates while emitting sulphuric acid.

This is what enables us to defeat pessimism, this is what enables us to defeat the apathy of those who refuse to see that Peru can prosper and prefer to become allies of the informal miner that contaminates and does not pay salaries, or the illegal lumberjack that destroys the Amazon region instead of growing large modern plantations that would allow us to have a lumber industry. This is what allows us to envisage that Peru has a future if it associates with state-of-the-art technology.

And the fourth topic is the growth of Ilo and Tacna in relation to the human development index, on which they now rank second nationwide. And the data are available for those who do not want to believe, and for the whiners — international data, not prepared by the government of Peru. On those grounds, we maintain that Peru is growing — that we are going to reach again (an annual economic rate of growth) close to 8% — because we associate development with investment.

This is a major occasion to see an investment of US$563 million, but over the past months we have seen endless investments of hundreds of millions. We now have two breweries that are worth US$200 million each. Three gas power plants built close to Lima, together amount to almost US$500 million in investment during the past year. The expansion of the thermal power plant of Santa Rosa in Lima, with an additional US$150 million, will amount to US$300 million. The privately owned “Platanal” hydro power plant has seen US$200 million invested, the Milpo mining unit, the most modern in the country and the most recent has had US$200 million invested, and the expansion of Aceros Arequipa saw a similar amount.

All of this would not be possible if there was not confidence in the development of Peru. Otherwise, who would bring a cent here to create jobs? What we need is trust, integrity, and a firm course so that everyone will benefit, so that there may be many Ilos in Peru with sound companies that are respectful of the environment, and their workers’ wages.

When I see Ilo and then turn my eyes towards Ayabaca in northern Piura, I see the difference between them. Ayabaca has more mining resources than Cuajone, but the people there live in the most dramatic poverty.

I say to those who are against the development of that region, to those who are blocking what in today’s world is a matter of competition among all nations: investment. Because each cent that is not invested here is taken by our neighbour, Chile, and thus, there are more workers there and they eat better. And each cent that Peru or Chile does not take is taken by China and this country continues to move further ahead each year, incorporating millions of Chinese into the modern economy. Or each cent that is not invested in Mexico must be invested in Peru; we welcome the US$2.1 billion that will give employment to thousands of Peruvians.

And this is, in social terms, what the government is interested in, employment, exports, indirect work for those who will transport the goods or prepare the meals for those who are working, or physicians to cure the workers and lawyers to defend the workers’ rights, in some cases. We need all of that, for that is what we eat, because Peru has to develop its resources, put its resources into value. We seem to be crazy — we have 630,000 sq. km of jungle, but we only sell US$200 million in lumber. Chile does not have a single hectare of the Amazon region and sells US$2 billion. Uruguay sells US$1 billion and we sell US$200 million and why? Just because somebody came up with the idea that land was untouchable, sacred. But, while they keep repeating that nonsense, the illegal and informal lumberjack continues to take out all of our mahogany and destroy the jungle.

We have hundreds of mineral deposits as large as Cuajone throughout Peru, but somebody has come up with the idea that those barren hills must continue barren and the poorest farmers next to them,
because we think they are sacred and that the apus are untouchable. But for whom do we open the path? For the illegal miner that spills acid and destroys the environment, does not pay taxes, does not pay wages, and ends up destroying nature?

They are the ones who have the support of all those who are against investment; therefore, we speak on behalf of the future, we speak on behalf of progress, we speak on behalf of employment; and I believe that on this occasion, with this environmental resource, we are demonstrating how capital and technology are capable of driving human well-being and the people’s development.

I salute and congratulate Southern Peru for this environmental advancement that sets an example for all Latin American countries.

Long live Ilo and long live Moquegua!