Peruvian Marxist party Peru Libre has won mayoral elections in five districts next to MMG Ltd's massive Las Bambas copper mine, with one new mayor-elect telling Reuters he hopes to serve as "mediator" to end social conflicts.
Luis Ivan Cruz was elected in a Sunday vote, becoming the new mayor-elect of Challhuahuacho, the town closest to Las Bambas, the world's No. 2 copper producer.
Cruz belongs to the same party that helped elect Peruvian President Pedro Castillo last year. The party is considered a foe of mining executives and had a strong showing near Las Bambas, but weak results elsewhere in regional elections all over Peru.
"This is a specific risk to MMG’s Las Bambas mine, which is adjacent to these provinces (as are several areas of potential brownfield expansion)," Brazilian bank BTG Pactual said in a note to clients.
BTG described Peru Libre members as "agitators" who are "well known" for taking an anti-mining stance.
The bank noted that regional elections had generally lowered mining risk across Peru, where recent protests have disrupted several large operations. However, it singled out concerns over Las Bambas.
Cruz struck a different tone.
"As the authority, we will serve the function of mediator," Cruz said in a phone interview.
"There are several conflicts for several reasons, but we will generate governance. The people, the State, and mining have to point toward the same path, which is that of development," he added.
A source close to Las Bambas said the company was hoping to have "respectful, transparent, constructive dialogue" with the new regional authorities.
Las Bambas earlier this year suspended operations for over 50 days due to a conflict with neighboring indigenous communities.
One of them, the Huancuire community, is opposing the company's planned expansion to build a new pit on land they formerly owned.
Las Bambas plans to invest $2 billion over the next five years to expand operations.
(Reporting by Marco Aquino; Additional reporting by Marcelo Rochabrun; Editing by Bill Berkrot)
