“Canada’s influence on mining is felt in Latin America more than in any other region of the world.” And its second most important market is Peru.
In 2017, BBC World released a report (in Spanish) on the often unsavoury business practices of Canadian mining companies in Latin America. Titled “The Conflicts and Controversies of Canadian Mining in Latin America (Which Clash With the Country’s Progressive Image)”, the article included the following passage (translated by yours truly):
Canada’s influence on mining is felt in Latin America more than in any other region of the world.
More than half of the country’s mining investment abroad is in [the] region, with 80 large projects.
It is perhaps inevitable that, given the number of mining projects, Canada is a lightning rod for criticism directed at mining in general.
But expectations were different when Canadian miners landed in the 1990s.
“Canadian mining came riding a discourse of clean mining and development aid,” Cesar Padilla, spokesman for the Observatory of Mining Conflicts in Latin America (OCMAL), an NGO critical of multinational mining companies, told BBC Mundo. “And ultimately they didn’t keep most of the promises and commitments they made”.
“Some Canadian mining companies have been characterized by large and long conflicts with communities, which bears little relation with the projected image of responsible modern mining…”
Which brings us to the present. And Peru, the world’s second-largest producer of silver, copper and zinc as well as Latin America’s largest producer of gold, lead, boron, indium and selenium. The country has seen its share of large and long conflicts, and is now in the grip of another. And in that conflict Canada is playing an important, albeit largely overlooked, role.
Protecting Canadian Investments, At Any Cost
With CAD $9.9 billion in assets, Canadian companies are Peru’s biggest investors in mineral exploration. That’s equivalent to 4.5% of Peru’s GDP. And Canada’s government is determined to not just protect that investment but to help it grow.
After meeting Peru’s new mining minister, Óscar Vera Gargurevich, Canada’s Ambassador to Peru (and Bolivia) Louis Marcotte tweeted: With Minister Oscar Vera Gargurevich, we are talking about modern mining investments that benefit the communities and Peru as a whole. Ready to support the Canadian delegation at PDAC [Prospectors and Developers Association of Canada] 2023, the most important mining exploration convention in the world, March 5-8 in Canada.”
Like the US, Canada was quick to recognize Boluarte’s regime. Since mid-December Canada’s Ambassador to Peru (and coincidentally, Bolivia) Louis Marcotte has met not only with Boluarte but also Peru’s foreign minister, vulnerable populations minister and mining minister. As Canadian author and activist Yves Engler notes, it is rare for a Canadian ambassador to have so much contact with top officials of any government:
The diplomatic activity highlights Ottawa’s commitment to consolidating the shaky coup government, which has been rejected by many regional governments and has seen multiple ministers resign. The diplomatic encounters are also an indirect endorsement of Boluarte’s repression. Security forces have shot hundreds and detained many more.
In the case of the US, its ambassador to Peru, Lisa Kenna, a nine-year veteran at the Central Intelligence Agency (CIA) and a former adviser to former US Secretary of State Mike Pompeo, met with Peru’s Defense Minister Gustavo Bobbio Rosas on December 6, just a day day before Castillo’s ouster. The timing of the meeting has stoked suspicions of US involvement in the coup, including from Mexico’s President Andrés Manuel Lopéz Obrador.
This plot has, of course, played out many times before, most recently in Bolivia, where both the US and the Washington-based Organization of American States (OAS) laid the foundations for the ouster of then-President Evo Morales. For its part, the Trudeau government made no statement about the state repression unleashed by Jeanine Añez’s coup government despite the mounting evidence of human rights violations. Instead, Ottawa agreed to work with Áñez.
As Urooba Jamal documents for the Spanish investigative journalism website, Ctxt, the ties between Canadian miners and the Canadian government are cosy:
There is an important link between Canadian mining and Canadian foreign policy. According to lobbying records obtained by the Justice and Corporate Accountability Project (JCAP) – an association of two Canadian law schools that advocates for communities affected by resource extraction (particularly indigenous communities) – representatives of the mining industry conduct powerful and insistent lobbying campaigns directed at the Canadian government…
Furthermore, Canada dominates this sector: most of the world’s mining companies are based in Canada, while 41% of the large mining companies in Latin America are Canadian, according to JCAP. These companies have also been embroiled in controversy in recent years. A landmark JCAP report published in 2016 found that 28 of these companies were implicated in forty-four deaths, 403 injuries, and 709 criminalization cases in thirteen Latin American countries over a fifteen-year period.
Culture of Impunity
Other countries on the American continent, including Mexico, Colombia, Bolivia and Argentina, have taken a wildly different stance regarding Boluarte’s regime, refusing to recognize its legitimacy while calling for new elections and the release of Castillo. At the recent summit of the Community of Latin American and Caribbean States (CELAC) a succession of national leaders denounced Boluarte’s ruthless repression of Peruvian protesters and called for her resignation.
By contrast, both Canada and the US have maintained their support while the Permanent Council of the Organization of American States (OAS) expressed its full backing, despite the mounting death toll. So far, at least 60 protesters have died at the hands of Peru’s police and armed forces, most of whom sustained gunshot wounds or injuries from other projectiles such as tear gas canisters. In a recent report, the Washington Office on Latin America, an NGO devoted to promoting human rights in the Americas, lambasted the culture of impunity at the top of the Peruvian government and security forces:
President Boluarte and her government say they are committed to ensuring public safety. However, attempting to achieve security through the disproportionate use of force is a predictably counterproductive strategy that, so far, has only intensified the protests and deepened the country’s crisis.
To date, no officials have been charged for the deaths that have taken place as a result of the actions of the security forces during the protests. Government representatives have called for the Public Ministry to investigate the abuses. But widespread impunity for human rights violations at the hands of the Peruvian security forces tempers hopes for effective accountability. Moreover, President Boluarte and her ministers have emphasized public messages that praise security forces and vilify demonstrators, congratulating police for their “immaculate” actions while blaming protesters for causing “chaos.” Such messages undermine confidence that the government is committed to ensuring accountability and preventing further abuses.
The Lithium Connection
On October 6, a parliamentary group closely tied to Peru’s now-deposed and imprisoned President Pedro Castillo presented a controversial bill to Congress. That bill sought to nationalize the exploration, exploitation and industrialization of lithium in the country. Peru’s Andean neighbor, Bolivia, which boasts the world’s largest deposits of lithium, already nationalized the white metal in 2008. Mexico took a similar step last year.
Article 3 of the proposed bill included the following passage:
“The economic resources from lithium and its derivatives are aimed at guaranteeing the homogeneous development of all regions of the country, of the peasant and native communities, and to strengthen the nation’s internal and external defense system.”
Unsurprisingly, the bill did not pass, which was probably welcome news for Macausani Yellowcake, a Peruvian subsidiary of Canada’s American Lithium Corp. In 2017, the company discovered significant deposits of lithium and uranium in Carabaya, a province in the southern region of Puno. According to a report in the Peruvian daily Republica, Ulises Solís, Macausani Yellowcake’s general had met with Castillo on two occasions in 2021, including once in New York, to try to persuade the president not to nationalize the strategic mineral. The president apparently said he wouldn’t.
During his run for president Castillo pledged to nationalize not just lithium but many of Peru’s mineral resources, which account for over 10% of the country’s GDP and 60% of its exports. He also promised stronger environmental regulations and that some profits would go to communities in mining regions. Needless to say, the pledge to nationalize mineral resources was gradually watered down under sustained pressure from multinationals and their political representatives in the country. It hardly helped that Castillo had zero control over Congress.
Castillo’s government proposed also hiking taxes on mining companies in the country, a move that even the IMF supported. In fact, the fund even offered to lend its expertise to the task. Peru has one of the lowest tax-to-GDP ratios in Latin America, according to the Organization for Economic Cooperation and Development, and the country’s then Economy Minister, Pedro, Francke said he wanted to improve those numbers. But for many of the mining companies operating in Peru, many of them Canadian, even that was a step too far.
Throughout this period, mining workers and communities across Peru staged protests, road blocks and strikes, including at the Chinese-run Las Bambas Mine, which provides 2% of the world’s copper. The protesters complained that local communities saw little benefit from the wealth generated by the mining.
With Castillo’s downfall in December, all talk of hiking taxes on mining profits or improving workers’ conditions has disappeared. Boluarte’s government is too busy crushing protests and navigating diplomatic and strategic tensions with many of its neighbors in the region to give much thought to such issues.
The Bigger Picture
As I posited in a piece in December, citing the renowned Mexican geopolitical analyst Alfredo Jalife, while the causes of Peru’s conflict may be largely internal, it has an important geopolitical dimension. Peru’s largest trading partner is China. In fact, the only country in the region that attracts more Chinese investment is Brazil, with an economy ten times larger than Peru’s. And before being toppled, Pedro Castillo’s government had expressed a clear interest in intensifying trade between the two countries. There was even talk of upgrading Peru’s trade agreement with China.
Suffice to say, this probably did not go down well with Peru’s second largest trading partner, the United States, which has a long, ongoing history of organizing or lending its blessing to coups against left-leaning governments in Latin America.
The Biden administration has also been disarmingly candid about its designs on Latin America’s natural resources, particularly lithium. As readers may recall, just last month the Commander of US Southern Command (USSOUTHCOM), General Laura Richardson, spoke about the need to “box out” China and Russia from those resources in Latin America. She also described how Washington is actively negotiating the sale of lithium in the region through its embassies.
At the beginning of February, the US government expressed its ongoing “support for Peru and President Boluarte, and her efforts to affirm Peru’s democracy, ensuring peace, stability and the unity of the Peruvian people.” It even “encouraged the [Boluarte] government to continue taking steps to hold those responsible for acts of violence accountable.”
This came on the heels of news that Boluarte herself had formally requested permission from Peru’s Congress to “allow a foreign navy unit and armed troops” to enter the country. The ostensible reason for the request, issued on Jan 19, is to allow the entry, in April, of the Juan Sebastián de Elcano (A-71), a training ship of the Spanish Navy, as well as foreign military personnel. But the timing of the request is, to put it mildly, suspicious. And Spain is not only a member of NATO and Peru’s former colonial power; it is also one of Peru’s biggest arms suppliers.
The real intended target of the request, says Yves Engler, is likely to be the US, which has already deployed troops to Peru on a number of occasions. In such an outcome, Canadian soldiers may also be deployed: “When the leftist Túpac Amaru guerrilla group took dozens of foreign diplomats hostage at the Japanese embassy in Lima in 1996, Canadian JTF-2 special forces reportedly participated in the US-led rescue effort that left all 14 guerrillas dead, many of them reportedly executed.”