After months of negotiations, the sale of Glencore’s Peruvian copper mine Las Bamba to the Chinese state owned company China Minmetals Corp, or specifically its subsidiary MMG, has been completed (April 2014). At $5.85 billion it is one of the largest Chinese investments in the commodities sector.
The Chinese investors are planning an increase in the production of copper with Las Bamba and Toromocho mines producing 400,000 tonnes of copper per year in the next five years, starting mid 2015.(1) With this takeover, China now controls 33% of the investments in Peruvian copper production companies (3).
Critics fear that this acquisition will lead to increased environmental pollution and labour violations. These criticisms are based on incidents occurring at the Shougang mine in Peru purchased in 1992, where there were constant labour and social conflicts (4). In 2007, Zijin Mining company bought a stake in the Monterrico Metals, running the Rio Blanco Mining Project. The project was halted by social conflict and torture of villagers in 2005. Thereafter, despite a change in management, in 2009 two workers lost their lives (6) , the mine continues to operate without the support of the people (7).
Another Chinese company, Chinalco, was sanctioned in March 2014 with a temporary suspention due to toxic pollution in the surrounding waters of the Toromocho mine (8).
The criticism of the state-owned Chinese enterprises affects not only their profit-oriented business philosophy, but the lack of transparency complicates the co-operation and control options of external actors. It is a positive sign that China Minmetals has signed the UN Global Compact and participates in the Extractive industries Transparency Initiative (EITI) (9).